STMicroelectronics , one of Europe's largest chipmakers, said on Thursday it expected sales to fall further in the first quarter of 2025, as the downturn seen in its key markets drags on into the new year.
French oil major TotalEnergies has signed a 15-year deal with STMicroelectronics to supply 1.5 terawatt hours of renewable electricity to power the semiconductor company's operations in France, the companies said on Tuesday.
STMicroelectronics' fourth-quarter 2024 results are likely to be hurt by a slow recovery in the industrial and automotive market.
The STMicroelectronics share quote has dropped nearly 50% from its 2024 high due to an industrial chip demand slowdown but remains very profitable with a strong balance sheet. STM's current valuation metrics are historically low on 'depressed' results, with an EV to forward EBITDA ratio of 6.1x, making it a standout bargain in the semiconductor sector. The Company should outperform the S&P 500 in 2025, with potential upside back to $50+ in 12–18 months, assuming business trends improve.
Continuous inventory corrections and a stretched valuation can be a risk, although STM's market position is strengthened by its innovative product launches.
Although STMicroelectronics' STM32N6 MCU Series bolsters its market position, ongoing inventory corrections and changes in consumer preferences may be a hurdle.
STMicroelectronics , one of Europe's biggest computer chip companies, has launched a new series of microcontrollers, its first for so called edge AI and machine learning.
STMicroelectronics faces significant challenges in FY 2024 but is expected to return to growth in H2 FY 2025, justifying a "buy" rating. STM's diverse product portfolio includes power chips, analog chips, MCUs, MPUs, and MEMS, serving automotive, industrial, and personal electronics sectors. Despite a 50% stock decline in 2024, STM trades at a 40% discount to sector median, offering substantial upside potential with a target price of $55-60 per share.
STMicroelectronics' multi-year partnership with Renault Group is expected to further broaden STM's capabilities and offer a diverse portfolio.
STM's enhanced product offerings and low price bode well for investors, despite weakness in the Industrial and Automotive end markets.
STMicroelectronics N.V. (NYSE:STM ) Morgan Stanley European Technology, Media & Telecom Conference Call November 22, 2024 4:40 AM ET Company Participants Jean-Marc Chery - Chief Executive Officer Lorenzo Grandi - Chief Financial Officer Unidentified Analyst Okay.
STMicroelectronics' new targets are well below previous estimates. The company indicates that Q1 2025 sales are weaker than anticipated, with a potential H2 recovery. Before re-priced for positive earnings changes, we decided to wait-and-see. STM's share price has declined by almost 50% year-to-date, prompting a cautious 12-month outlook and a revision of 2025 valuation numbers.