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Microchip Technology (MCHP)
Microchip Technology makes microcontroller, mixed-signal, analog and flash-IP integrated circuits for a wide range of industries. Its solutions are used by more than 120,000 customers around the world.
The semiconductor industry isn’t exactly a market favorite at the moment, and Microchip’s stock price reflects that. Year to date, the shares are down about 24%.
That could give contrarian investors something to think about, given how well Microchip’s core business is doing. In Q1, the company generated record net sales of $1.84 billion, up 25.7% from a year ago. Operating cash flow came in at $747.7 million, also marking a new record.
BMO Capital Markets analyst Ambrish Srivastava has an ‘outperform’ rating on Microchip and a price target of $85 — roughly 32% above where the stock sits today.
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As one of the leading providers of customer relationship management software, HubSpot was a market darling in 2020 and most of 2021.
But momentum has taken a sharp turn. Trading at $310 apiece today, the stock is down a staggering 64% from a top of $866 last November. Of course, you’d have a hard time knowing that from its latest earnings report.
In Q1, total revenue grew 41% year over year to $395.6 million, driven by a 42% increase in subscription revenue. HubSpot earned an adjusted net income of 54 cents per diluted share for the quarter, also marking a substantial improvement from the 31 cents earned a year ago.
BMO Capital Markets analyst Keith Bachman recently lowered his price target on HubSpot from $485 to $405. However, he maintained an ‘outperform’ rating on the stock, and the new price target still implies a solid upside of 30%.
Unlike the previous two picks, Cigna shares have held up well in 2022. The healthcare insurance giant is up 10% year to date, substantially outperforming the S&P 500’s double-digit decline.
According to BMO Capital Markets analyst Matt Borsch, the stock could see even more gains ahead. On Monday, Borsch raised his price target on Cigna from $300 to $320 while reiterating an ‘outperform’ rating. The new price target suggests a potential upside of 25%.
Cigna’s business is on the right track. The company added 698,000 customers in Q1, bringing its total medical customer base to 17.8 million.
Revenue grew 7.4% year over year to $44 billion for the quarter, while adjusted income from operations per share increased 27% to $6.01.
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