Morgan Stanley analyst Lee Simpson upgraded the rating on STMicroelectronics NV to a Buy today, setting a price target of €36.00.
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Lee Simpson has given his Buy rating due to a combination of factors, most notably a stronger outlook for fiscal 2027 powered by data center demand. He expects a significant boost from STM’s power and optical solutions, with optical revenues ramping through pluggables and NPOs into 2026–27, and further upside later from CPO adoption, while also seeing early signals of cyclical recovery.
He additionally factors in a modest rebound in industrial markets and some improvement in automotive as safety-grade MCU design wins begin to translate into sales, supported by the integration of NXP’s MEMS business. On this basis, he forecasts above-consensus 2027 sales and earnings, and argues that growing relevance in data centers and cyclical dynamics justify an 18–20x multiple, leading him to set a €36 price target and upgrade the stock to Overweight.
In another report released on March 17, Kepler Capital also maintained a Buy rating on the stock with a €34.00 price target.