STMicroelectronics, the Technology sector company, was revisited by a Wall Street analyst today. Analyst Tristan Gerra from Robert W. Baird upgraded the rating on the stock to a Buy and gave it a $50.00 price target.
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Tristan Gerra has given his Buy rating due to a combination of factors including the ongoing recovery cycle, expansion in gross margins, and a bottoming out of SiC revenue. The company is expected to benefit from an increase in content in upcoming new products, which should accelerate gross margin recovery by the third quarter. Additionally, the company is poised to take advantage of easy revenue comparisons in the latter half of the year and into the next, particularly in the smartphone, SiC, and industrial sectors.
STMicroelectronics is also improving its cost structure through the ongoing ramp-up of 300mm capacity, which is expected to constitute 57% of total production by 2027. This transition, along with the company’s targeted capital expenditure reduction, is anticipated to enhance the product mix and profitability. Furthermore, the company’s joint venture with Sanan Optoelectronics is expected to boost SiC revenue, particularly in the Chinese EV market, while opportunities in data centers and satellite sectors further strengthen the growth outlook. The new price target is set at $50, reflecting the attractive valuation and growth prospects.
In another report released on July 17, Craig-Hallum also maintained a Buy rating on the stock with a $0.00 price target.