Craig-Hallum downgrades STMicroelectronics to Hold, keeps $28 target

As previously reported, Craig-Hallum downgraded STMicroelectronics (STM) to Hold from Buy with a $28 price target The firm notes that while both auto and industrial markets have modestly improved, unused production capacity and worsened exchange rates have led to gross margins weakening and it believes they will remain depressed for some time. Craig-Hallum thinks investors should step to the sidelines until better visibility into orders and material improvement in GMs is clear. The firm further points out that STMicroelectronics also commented about strong pricing pressure in China for SiC, with China representing 14% of overall revenue, as the Chinese government is calling for the use of China based products.