STMicroelectronics: Oddo still a buyer - raises TP
(CercleFinance.com) - Oddo BHF maintains its "buy" rating on the STMicroelectronics share, having increased its corresponding target price from 36 euros to 40 euros, after raising its 2020 and 2021 earnings estimates by around 12% for the semiconductor manufacturer.
Although its Q3 results came in below expectations, due to the gross margin, the broker cannot see anything structural therein and has adopted Q4 and FY 2020 targets that are significantly above the consensus.
The broker says that STM remains the "clearest" story in its sector in terms of growth and prospects for improvement in its margins. It estimates that the stock is trading at a 12-month forward EBITDA of 11.2x, which is below IFX/sector (14.5x), it adds.
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