STMicroelectronics: Stifel lowers target price

(CercleFinance.com) - On Tuesday Stifel reduced its target price for STMicroelectronics shares from E38 to E36, saying that it expects the company's business to recover less vigorously than forecast next year.


The broker also cut its EPS forecast for the chipmaker by 5% for 2024, followed by 9% for 2025.

Stifel explains that the outlook communicated by ST suggests that business will bottom out in Q2, before a modest improvement in Q3.

In its view, however, the turnaround in Q4 looks less dynamic than initially hoped, particularly in view of the recent deterioration in the automotive sector.

While it still expects the automotive and industrial applications markets to rebound by 2025, Stifel believes this will be at a moderate pace.

Trading at a 2025 P/E of around 13x, the analyst nevertheless believes that ST's valuation is attractive at current levels, and that it should benefit from an upward trend once the cyclical recovery has begun, leading him to maintain his Buy recommendation on the stock.


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