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Research Alert: CFRA Maintains Buy Opinion On Adss Of Stmicroelectronics

05/10/2021 20:27

12:25 AM EDT, 05/11/2021 (MT Newswires) -- CFRA, an independent research provider, has provided MT Newswires with the following research alert. Analysts at CFRA have summarized their opinion as follows:

We raise our target price to USD46 (USD44), representing a 2021 P/E of 25x, a premium to peer average of 21x, which is justified in our view by its relatively higher earnings growth trajectory and diversified portfolio. Q1 2021 net revenues grew 35% and beat its guidance by 3%, thanks to continued acceleration of demand globally and semiconductor shortages. Gross margin came in slightly higher and resulted in a 90% growth in EBIT, which beat consensus estimates by 5%. STM's Q2 2021 revenue and gross margin guidance implied earnings 5% above consensus expectations. STM expects USD12.1 billion revenue for 2021 (above consensus' USD11.9 billion), but this only implies 5% H/H for H2 2021 vs. historically 15%-25% due to STM's production capacity constraints. We may see positive spillover effect into 2022. STM also expects 2021 capex to be at the higher end of its target, signaling the strong underlying demand. We raise 2021 and 2022 EPS to USD1.84 (USD1.75) and USD2.10 (USD1.95) to reflect the positive outlook.