UPDATE: HSBC Downgrades STMicroelectronics NV
In a note issued Thursday, HSBC reported a Downgrade on STMicroelectronics NV (NYSE: STM) to an Underweight rating.
HSBC analyst Christian Roth said, "While we give management credit for delivering on its cost-cutting road map we remain somewhat skeptical on the required top-line development and the turn-around of the DCG business."
Roth continued to say, "We model a slower revenue trajectory and an EBIT margin of only 9% for 2016e and derive a fair value of EUR6 (from EUR5.8)."
Roth proceeded to say, "Trading on 0.9x 2015e EV/Sales and 18x 2015e PE (8% RoE) we believe the current valuation does not provide an attractive risk/reward balance any longer and hence we downgrade to UW.
"We continue to prefer Infineon (IFX GR, CMP EUR8.61, OW, target price EUR9.6), which also benefits from positive momentum in automotive and industrials but trades at more attractive multiples (1.5x EV/Sales, 15x PE, 14% RoE)."
STMicroelectronics NV shares closed at $9.45 yesterday, an increase of 0.64 percent.
Latest Ratings for STM
|Oct 2014||Morgan Stanley||Downgrades||Equalweight||Underweight|
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