STMicroelectronics: Morgan Stanley downgrades its recommendation
(CercleFinance.com) - Morgan Stanley on Friday downgraded its recommendation on STMicroelectronics shares from 'overweight' to 'in-line weighted', with a price target reduced from E48 to E35.
In a research note, the financial intermediary justifies its downgrade by the further lowering of the semiconductor manufacturer's forecasts for 2024, this time attributed to excessively high inventories at industrial customers and falling demand in the automotive sector.
Capacity under-utilization continues to penalize margins, and the company estimates that it will take at least one to two quarters to resolve problems related to inventory flow channels", the analyst points out.
Overall, this trough is becoming the worst we've seen in a long time for the group", stresses MS, who underlines his concern about the lack of visibility surrounding a possible recovery in the second half of the year.
From a professional point of view, we'll have to wait for the next quarterly publications in order to be able to observe any signs of improvement in fundamentals, he warns in his note.
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The information and analyses distributed by Cercle Finance are only intended as decision-making support for investors. Cercle Finance's responsibility may not be entailed, either directly or indirectly following the use of such information and analyses by readers. Any non-professional investor is recommended to consult a professional advisor before making any investment decision. This indicative information in no way constitutes any invitation to sell or buy securities.
The information and analyses published by Cercle Finance are intended solely as a decision-making aid for investors. Cercle Finance cannot be held responsible, directly or indirectly, for the use of information and analyses by readers. Uninformed investors are advised to consult a professional advisor before investing. This information does not constitute an invitation to sell or a solicitation to buy.
In a research note, the financial intermediary justifies its downgrade by the further lowering of the semiconductor manufacturer's forecasts for 2024, this time attributed to excessively high inventories at industrial customers and falling demand in the automotive sector.
Capacity under-utilization continues to penalize margins, and the company estimates that it will take at least one to two quarters to resolve problems related to inventory flow channels", the analyst points out.
Overall, this trough is becoming the worst we've seen in a long time for the group", stresses MS, who underlines his concern about the lack of visibility surrounding a possible recovery in the second half of the year.
From a professional point of view, we'll have to wait for the next quarterly publications in order to be able to observe any signs of improvement in fundamentals, he warns in his note.
Copyright (c) 2024 CercleFinance.com. All rights reserved.
The information and analyses distributed by Cercle Finance are only intended as decision-making support for investors. Cercle Finance's responsibility may not be entailed, either directly or indirectly following the use of such information and analyses by readers. Any non-professional investor is recommended to consult a professional advisor before making any investment decision. This indicative information in no way constitutes any invitation to sell or buy securities.
The information and analyses published by Cercle Finance are intended solely as a decision-making aid for investors. Cercle Finance cannot be held responsible, directly or indirectly, for the use of information and analyses by readers. Uninformed investors are advised to consult a professional advisor before investing. This information does not constitute an invitation to sell or a solicitation to buy.