Benzinga | Jan 31, 2022 11:47AM EST

Here's Why UBS Is Bullish On Microchip Tech

* UBS analyst Pradeep Ramani upgraded Microchip Technology Inc (NASDAQ:MCHP) to Buy from Neutral with a price target of $92, up from $82, suggesting an upside of 21.5%.

* The analyst states that the Analog cycle is transitioning to the inventory build phase. However, it still "has legs" at least through 2022 and likely into the first half of 2023 amid "stretched" lead times, below-normal chip inventories, and "solid" auto and industrial demand.

* Ramani believes that consensus estimates for Microchip look conservative in this context, adding that the recent pullback improves the setup for the stock.

* Price Action: MCHP shares traded higher by 4.76% at $75.66 on the last check Monday.