STMicro: Stifel cuts its target price

(CercleFinance.com) - Stifel reiterates its buy recommendation on the stock, but cuts its target price to E26 (from E31) following the announcement of fourth-quarter 2024 results.


Following another set of disappointing results, we are once again updating our financial model and now forecast a later recovery in industrial end-markets and weaker automotive activity in 2025, leading to a significant drop in sales in 2025', says the analyst firm.

The analyst believes that ST's cyclical recovery should be slow from a much lower-than-expected trough in the first half of 2025. Nevertheless, we still expect the automotive and industrial end-markets to recover in 2026, but at a more moderate pace, with sales declining in 2025', says Stifel.

'We have reduced our EPS forecasts by 56% for 2025'.

With a 2026E P/E of around 16x for an earnings recovery year, we believe ST's valuation is attractive and that the shares should recover once cyclical momentum reverses'.

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