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TD Cowen raised its price target on STMicroelectronics (NYSE:STM) stock to $30.00 from $23.00 on Friday, while maintaining its Hold rating on the semiconductor manufacturer. According to InvestingPro data, the stock has shown strong momentum with a 20% gain year-to-date, though technical indicators suggest it may be entering overbought territory.
The price target adjustment follows investor meetings with STMicroelectronics’ Investor Relations representative Alessandra Fumagalli, according to TD Cowen.
The research firm expressed positive sentiment regarding STMicroelectronics’ secular exposure, technology portfolio, and customer-specific content opportunities in the semiconductor market.
Despite these positive factors, TD Cowen indicated that the stock would need "a clearer path to beats/raises to drive upside after recent gains" to justify a more bullish outlook.
The firm’s updated price target represents a potential upside from STMicroelectronics’ current trading levels, though TD Cowen maintained its neutral stance with the Hold rating.
In other recent news, STMicroelectronics has announced a comprehensive program to upgrade its manufacturing operations over the next few years, focusing on advanced manufacturing infrastructure and technology R&D. This initiative aims to achieve significant cost savings by the end of 2027. Additionally, the company has entered into a joint development agreement with Innoscience to enhance gallium nitride (GaN) power solutions, leveraging each other’s manufacturing capacities in Europe and China. The partnership is expected to bolster supply chain resilience and meet global demand for GaN technology across various industries.
Meanwhile, BofA Securities has revised its outlook on STMicroelectronics, lowering the stock price target to $25 while maintaining a neutral rating. This adjustment follows the company’s latest earnings report, which showed a positive shift in tone with anticipated sales growth in the second quarter. However, concerns remain due to record-high inventory levels and challenges in the automotive sector. Analysts have also adjusted their earnings and sales estimates for the coming years, reflecting these ongoing issues.
STMicroelectronics also announced the resignation of Maurizio Tamagnini from its Supervisory Board. The company has not yet named a successor or provided reasons for his departure. As the semiconductor industry continues to evolve, STMicroelectronics’ strategic initiatives and partnerships are critical to navigating current challenges and maintaining its competitive edge.
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