Siltronic’s Hold Rating: Navigating Prolonged Destocking and Negative Cash Flow Outlook

In a report released today, Constantin Hesse from Jefferies downgraded Siltronic (0R8P – Research Report) to a Hold, with a price target of €50.00.

Constantin Hesse has given his Hold rating due to a combination of factors affecting Siltronic’s financial outlook. The company is currently experiencing a prolonged destocking cycle, which poses challenges to its short-term growth prospects. Despite the stock’s valuation being at historical lows, there are no immediate catalysts that could drive a significant upside.
Furthermore, Siltronic is expected to continue facing negative free cash flow in the coming years, particularly in 2025 and 2026. This negative outlook is contingent on the recovery curve anticipated next year. However, the company’s substantial cash reserves mitigate the need for additional capital, which in turn limits the potential downside risk to the stock. These considerations have led to the Hold rating.

In another report released on March 10, Berenberg Bank also maintained a Hold rating on the stock with a €47.00 price target.