Microchip Earnings: Likely To Weather Any Upcoming Slowdowns; Maintain $90 FVE

Wide-moat Microchip Technology reported solid fiscal fourth-quarter results and provided investors with a resilient forecast for the June quarter. We maintain our $90 fair value estimate and continue to view shares as undervalued. Shares sold off about 5% after hours, likely because inventory is building up and Microchip is rescheduling some customer orders to avoid even more inventory being stuffed into the supply chain. Even if an inventory correction were to occur, we consider Microchip to be particularly adept at navigating industry cycles, and we often find downturns to be attractive buying opportunities for patient investors with a long-term time horizon.