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Investing.com - Jefferies has reduced its price target on STMicroelectronics NV (EPA:STM) (NYSE:STM) to €30 from €33 while maintaining a Buy rating on the stock. The semiconductor company, currently valued at $23.6 billion, has seen its shares decline nearly 18% over the past week.
The price target adjustment follows STMicroelectronics’ third-quarter gross margin miss, which Jefferies notes will reduce the company’s potential earnings in 2026 if the Euro remains at current levels.
Despite the margin concerns, Jefferies remains confident that the automotive and industrial chip segment is experiencing an upcycle, which should benefit STMicroelectronics going forward.
The research firm expects STM’s strong sales momentum observed in the third quarter to continue into the fourth quarter and throughout 2026, providing a foundation for future growth.
Jefferies also anticipates that gross margins will begin to improve from their current lower levels alongside strengthening sales, viewing the current stock weakness as "an attractive buying opportunity" for investors.
In other recent news, STMicroelectronics has been the subject of several analyst reports, reflecting varied perspectives on its future. Barclays (LON:BARC) lowered its price target for STMicroelectronics to €20, maintaining an Underweight rating due to concerns about the semiconductor industry’s recovery and potential risks. In contrast, Baird has upgraded the company’s rating from Neutral to Outperform, significantly increasing its price target to $50.00, citing a recovery in the semiconductor cycle and expectations for gross margin expansion. Additionally, Baird noted a significant improvement in the fourth-quarter backlog, with most end markets returning to year-over-year growth, except for Automotive.
TD Cowen also adjusted its outlook, raising its price target to $30.00 while keeping a Hold rating. This adjustment came after investor meetings with STMicroelectronics’ Investor Relations, indicating positive engagement with stakeholders. The varying analyst opinions highlight the complexity of the semiconductor market and differing expectations for STMicroelectronics’ performance. These developments provide investors with a range of insights into the company’s potential trajectory in the coming months.
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