At $98 per share, Microchip trades at 18x FY18A earnings, 15x FY19E earnings, and 13.8x FY20E earnings. Note that FY19 for Microchip ends March 2019, so it is prudent to value Microchip stock at FY20E earnings. Historically, Microchip has traded at a three- and five-year forward P/E of 16.5x and 17x, respectively. This may be low compared to Texas Instruments (18x) and the potential growth of the Internet of Things (IoT). At 15x my forward earnings projection (to reflect the leveraged balance sheet), Microchip’s price should be $106. This implies a 10%+ upside (with dividends included) from its current price. I believe it doesn’t trade at my target price yet since Microchip levered up significantly to acquire Microsemi. It is now engaged in a long-term process to reduce that debt steadily. During the last quarter, Microchip paid down $378 million in debt and reduced net debt on the balance sheet by about $350 million. The company is committed to using excess cash generation beyond dividend payments to pay down debt. Microchip Technology develops and manufactures specialized chips used in a wide variety of technology products. Microchip is a leading microcontroller (MCU) company....