STMicro: Stifel still a buyer, but cuts TP

(CercleFinance.com) - Stifel reiterates its buy recommendation on the STMicro stock, but cuts its target price for it to E26 (from E31), following the announcement of its Q4 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, the broker says.

The analyst believes that ST's cyclical recovery should be slow from a much lower-than-expected trough in H1 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, Stifel says.

Analysts have reduced their EPS forecasts by 56% for 2025.

Trading at 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, it adds.


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