Bank of America Securities analyst Didier Scemama has maintained their neutral stance on 0INB stock, giving a Hold rating on July 25.
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Didier Scemama’s rating is based on several strategic and financial considerations surrounding STMicroelectronics NV’s recent acquisition of NXP’s MEMS sensor business. The acquisition, valued at up to $950 million, is expected to enhance STM’s margins and strengthen its position in the growing MEMS and sensor market, which is projected to expand at a compound annual growth rate of over 4% from 2024 to 2028. Despite these positive prospects, the current high cost structure poses a challenge to achieving a higher valuation multiple.
While the acquisition is anticipated to be accretive to STM’s margins, with expected contributions to earnings before interest and taxes in the coming years, the company’s operational leverage remains weak, justifying the Hold rating. The transaction will be funded through existing liquidity, and STM will continue to manufacture MEMS structures internally, which supports the expected gross margins. Additionally, the acquisition facilitates STM’s expansion into automotive and industrial markets, although competition remains strong, particularly from market leader Bosch.
In another report released on July 25, Goldman Sachs also maintained a Hold rating on the stock with a €22.60 price target.