Microchip initiated with an Outperform at Evercore ISI

Evercore ISI analyst Mark Lipacis initiated coverage of Microchip with an Outperform rating and $106 price target. The company is a a key supplier into the emerging internet of things market that is expected to grow to 10s of billions of units, and its operating margins should expand by 1,000bps over the next 10 years, the analyst tells investors in a research note. . Microchip’s relative earnings multiple vs. S&P 500 should also re-rate to parity vs. a 10-year average of 0.89-times amid investor focus on the company’s organic growth, deleverage, and capital returns, the firm added.