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On Tuesday, Berenberg analysts downgraded Soitec (EPA:SOIT) stock from Buy to Hold, adjusting the price target to €50 from €75. The decision comes in response to challenges faced by Soitec in its core RF-SOI activity, which is experiencing difficulties due to inventory reductions and node shrinkage.
The analysts noted that while Soitec’s POI and Photonics-SOI products have shown strong growth, the anticipated expansion in SmartSiC has been delayed. Additionally, the weak U.S. dollar is expected to further impact growth and profitability for the company this year.
Despite the current low share price, Berenberg analysts cited a lack of forthcoming positive catalysts as a reason for the downgrade. The expectation of operationally-leveraged revenue growth driven by RF-SOI content and new products has not materialized as anticipated.
Soitec, listed on Euronext (EPA:ENX) Paris under the ticker SOI:FP and OTC under SLOIF, faces a challenging market environment as it navigates these headwinds. The analysts’ revised outlook reflects a more cautious stance on the company’s near-term prospects.
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