Microchip upgraded at UBS, firm sees nearly 28% upside
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Microchip Technology (NASDAQ:MCHP) received some positive commentary from Wall Street, as UBS upgraded the stock to buy, noting that semiconductor cycle has "legs."
Analyst Pradeep Ramani upgraded the stock to buy and raised the price target to $92, from $82, noting that the "risk-reward" is now skewed two to one to the upside.
"The Analog cycle is transitioning to the inventory build phase but, in our view, still has legs at least through 22' and likely into 1H:23 as lead times are stretched, customer chip inventories are still below normal and Auto/Industrial demand is solid," Ramani wrote in a note to clients. 
The analyst added that Wall Street estimates are conservative and the recent decline in the stock "improves the setup."
"We believe the market is not yet giving MCHP credit for the recent pivot to more consistent capital allocation and this should catalyze a through cycle re-rating closer to [Texas Instruments] (NASDAQ:TXN)," Ramani added.
Microchip Technology (MCHP) shares were up nearly 3% in pre-market trading, recently changing hands at $74.20.
In addition, the analyst added that Microchip's revenue mix is shifting towards "megatrends," including edge computing, data center, electric vehicles and 5G.
Last month, Microchip Technology (MCHP) was named an electric vehicle semiconductor stock to watch by Seeking Alpha's Quant Rating.