Jefferies cuts Siltronic stock rating to hold, slashes price target

Published 17/03/2025, 06:54
Jefferies cuts Siltronic stock rating to hold, slashes price target

On Monday, Siltronic AG (ETR:WAFGn) (WAF:GR) (OTC: SSLLF) experienced a shift in its stock outlook as Jefferies analyst Constantin Hesse downgraded the company’s stock rating from Buy to Hold. The analyst also significantly reduced the price target for Siltronic, bringing it down to EUR 50.00 from the previous EUR 90.00.

The downgrade was attributed to several factors impacting the company’s financial performance. According to the analyst from Jefferies, Siltronic faces a "continued challenged outlook and lack of free cash flow (FCF)." This situation has been further compounded by increasing power inventories, which do not bode well for the company’s short-term prospects.

The analyst’s report suggests that Siltronic’s free cash flow is expected to remain in the negative territory for both 2025 and 2026. The forecast for 2026 is particularly uncertain and hinges on the recovery curve that is anticipated for next year. Despite these concerns, the analyst noted that Siltronic has a "more than sufficient cash cushion," which appears to mitigate the immediate need for raising additional capital and thus limits the downside risk for the company’s shares.

Siltronic, a manufacturer specializing in silicon wafers, has been navigating a challenging market environment. The revised price target and stock rating reflect the analyst’s current assessment of the company’s financial health and market position. While the valuation of Siltronic’s shares remains at historical lows, the lack of immediate catalysts to drive growth or profitability has led to the revised outlook by Jefferies.

This article was generated with the support of AI and reviewed by an editor. For more information see our T&C.

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