STMicroelectronics NV (0INB – Research Report), the Technology sector company, was revisited by a Wall Street analyst today. Analyst Didier Scemama from Bank of America Securities reiterated a Hold rating on the stock and has a €22.00 price target.
Didier Scemama has given his Hold rating due to a combination of factors affecting STMicroelectronics NV. The company is experiencing high inventory levels, which have reached record highs, and this is impacting gross margins due to unused capacity charges. Although there are signs of improvement, such as a reduction in industrial inventories in Asia and expected growth in the second quarter, automotive demand remains subdued despite strong design wins.
Additionally, while management is optimistic about cost-saving targets and market share gains in microcontrollers, the medium-term outlook for the Power & Discrete segment is less favorable due to weak market dynamics. These challenges, coupled with a cautious outlook for fiscal year 2025, have led to a reduction in price objectives and a reiteration of the Neutral rating. The valuation adjustments reflect these ongoing uncertainties and the company’s current position at the lower end of its historical valuation range.
In another report released today, Morgan Stanley also maintained a Hold rating on the stock with a €22.00 price target.