BofA lifts Infineon stock target, maintains buy rating

On Tuesday, BofA Securities increased its price target for Infineon Technologies AG (IFX:GR) (OTC: OTC:IFNNY) shares to €44.00 from the previous €40.00, while reaffirming a Buy rating on the stock. The adjustment comes as the firm anticipates Infineon to benefit from specific market advantages. According to InvestingPro data, Infineon maintains a strong financial health score of 2.63 (rated as GOOD) and operates with a moderate debt level, with a debt-to-equity ratio of 0.3.

The analyst at BofA Securities highlighted that the revised price target is supported by positive expectations for Infineon’s performance in the artificial intelligence servers and microcontroller unit (MCU) market segments. The company’s growth in these areas is expected to be a key driver, particularly as the industry approaches a cyclical trough, which presents a favorable comparison to European and global counterparts. InvestingPro analysis reveals the company as a prominent player in the Semiconductors industry, with over $16.6 billion in revenue over the last twelve months. Get access to 10+ additional exclusive ProTips and comprehensive financial metrics with InvestingPro.

BofA Securities has raised its revenue estimates for Infineon by 4%-7% and its EBITDA projections by 9%-12% for the fiscal years 2025 to 2027. These revised financial forecasts have led to an increase in expected earnings per share (EPS) by 15% for fiscal year 2025 and by 3% for fiscal years 2026 and 2027. The company currently maintains a healthy EBITDA of $5.3 billion and a gross profit margin of 42.3%.

The new price objective of €44, which translates to an ADR price objective of $46, is based on an 11x multiple of the company’s expected FY26 enterprise value to EBITDA. This multiple is an increase from the previously used 10.4x but still falls within the historical range of 6.5x to 13x, with a median of 9x over the last decade, excluding the COVID-19 period.

Infineon’s stock price is set to reflect these anticipated gains in market share and financial performance, as indicated by BofA Securities’ updated analysis and continued endorsement of the stock as a top pick.

In other recent news, Infineon Technologies AG has seen substantial attention from analysts. Susquehanna upgraded Infineon’s stock rating from Neutral to Positive, and hiked the price target to EUR45.00. This upgrade is attributed to Infineon’s expanding opportunities in artificial intelligence (AI) power, including power supply units, 48V bus converters, and on-GPU/XPU power. Susquehanna also cited Infineon’s leading position in wide-bandgap semiconductors, particularly silicon carbide (SiC) and gallium nitride (GaN), as a potential driver for new architectures in the GPU and ASIC markets.

Simultaneously, TD Cowen reiterated a Buy rating on Infineon, emphasizing the company’s strong positioning in the semiconductor sector and its potential for long-term growth. This assessment is part of the firm’s Best Ideas 2025 note, highlighting Infineon’s conservative financial estimates and its strong financial health. The firm also recognized Infineon’s significant role in growth areas such as electric vehicles, advanced driver-assistance systems, and artificial intelligence power management.

In addition to Susquehanna and TD Cowen, other analyst firms such as Berenberg, CFRA, and Goldman Sachs have maintained a Buy rating on Infineon, albeit with adjusted price targets. Infineon’s earnings per share forecasts were revised for FY 24 and FY 25, with a new projection introduced for FY 26. The company’s AI power business is reportedly exceeding expectations, with sales anticipated to double in FY 25.

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