Balancing Early Cycle Recovery With Persistent Headwinds: Justifying a Hold Rating and $32/€27.50 Target Pending Clear EPS and Margin Progress

In a report released yesterday, Joshua Buchalter from TD Cowen maintained a Hold rating on STMicroelectronics, with a price target of $32.00.

Joshua Buchalter has given his Hold rating due to a combination of factors related to both the improving cycle and lingering headwinds. He acknowledges that demand indicators are gradually turning up, particularly in industrial markets, and that inventory levels are normalizing, with excess stock in distribution channels expected to clear by the end of the second quarter. Personal Electronics, especially business tied to Apple, is viewed as a relative bright spot, but he does not foresee a major step-up in content gains this year amid a volatile smartphone environment.

At the same time, Buchalter highlights several constraints that limit near-term upside. Automotive results fell short of what improving auto sales trends might imply, partly due to company-specific issues such as the roll-off of capacity reservation fees and comparatively lower exposure to China. He also points to continued confusion about the magnitude and timing of any incremental Apple content, and emphasizes that gross margin, while likely past its trough into 2026, is still meaningfully below peers and will take time to improve as underutilization and capacity-related costs normalize. Given these mixed signals and the recent share price strength, he believes the company must deliver clearer earnings and margin progress—approaching roughly $2 in EPS—before a more constructive stance is warranted, leading him to stay on the sidelines with a Hold rating and a $32/€27.50 price target.

According to TipRanks, Buchalter is a 5-star analyst with an average return of 19.2% and a 63.94% success rate. Buchalter covers the Technology sector, focusing on stocks such as Advanced Micro Devices, Allegro MicroSystems, and Broadcom.

In another report released yesterday, TipRanks – Anthropic also reiterated a Hold rating on the stock with a $29.00 price target.