Shares of Microchip Technology (NASDAQ:MCHP) rose as much as 12.5% on Tuesday morning, peaking near 11 a.m. EDT before backing down to an 11% gain 45 minutes later. The maker of analog and mixed-signal integrated circuits raised its first-quarter guidance after the closing bell on Monday, inspiring a storm of analyst upgrades and raised price targets.
Microchip now expects first-quarter sales to land near $1.29 billion. Adjusted earnings should stop in the vicinity of $1.45 per share. The midpoints of the company's original guidance pointed to earnings of approximately $1.35 per share on $1.25 billion of top-line sales.
The updated targets were based on actual results through the first two months of the quarter.
"COVID-19 related supply chain disruptions, which were primarily in Malaysia and Philippines, have eased," CEO Steve Sanghi said in a prepared statement. "We have begun to make up for lost production and expect to continue to gain ground through the end of this quarter."
Many analysts raised their target prices on Microchip's stock to levels that would represent new all-time highs. Needham analyst Rajvindra Gill, for example, set a target price of $130 per share based on a fast rebound in orders from the automotive industry. Citi's Chris Danely aimed for $120 per share, citing robust inventory hoarding in Microchip's product delivery pipeline.
As a reminder, Microchip's all-time record price was a brief visit to $112.47 in January.