STMicroelectronics NV: Hold Rating Amid Margin Pressures and Uncertain Outlook

STMicroelectronics NV (0INB – Research Report), the Technology sector company, was revisited by a Wall Street analyst today. Analyst Lee Simpson from Morgan Stanley maintained a Hold rating on the stock and has a €22.00 price target.

Lee Simpson has given his Hold rating due to a combination of factors impacting STMicroelectronics NV’s financial outlook. The company’s first-quarter performance was largely in line with expectations, although it faced challenges from higher unused capacity charges, which slightly impacted its gross margin. Sales figures met expectations, with strong personal electronics sales balancing weaker performances in the automotive and industrial sectors.
Looking ahead, the guidance for the second quarter suggests continued pressure on margins due to ongoing capacity charges, even though sales are expected to slightly exceed consensus estimates. The absence of a full-year guidance amid tariff uncertainties adds to the cautious outlook. Additionally, while the company is committed to its cost restructuring and global manufacturing plans, it has not provided substantial new details, contributing to the Hold rating recommendation.

Simpson covers the Technology sector, focusing on stocks such as Cadence Design, Synopsys, and ARM Holdings PLC ADR. According to TipRanks, Simpson has an average return of -3.2% and a 39.06% success rate on recommended stocks.

In another report released on April 22, J.P. Morgan also maintained a Hold rating on the stock with a €26.00 price target.