STMicroelectronics stock initiated at Neutral by Mizuho with $22 target

Investing.com - STMicroelectronics (NYSE:STM) received a Neutral rating from Mizuho as the investment firm initiated coverage with a $22.00 price target. According to InvestingPro data, this target price is below the company’s Fair Value, suggesting potential upside despite the neutral stance. The stock currently trades at a P/E ratio of 38.14, indicating a relatively high earnings multiple.

Mizuho highlighted STMicroelectronics’ position as a leading European analog original equipment manufacturer and the third largest globally, noting the company faces a mix of long-term opportunities and near-term challenges. InvestingPro identifies STM as a prominent player in the Semiconductors & Semiconductor Equipment industry, with a financial health score rated as "FAIR."

The firm identified secular tailwinds for STM including automotive electrification, advanced driver assistance systems (ADAS), robotaxis, and software-defined vehicles, which could drive high single-digit percentage automotive revenue compound annual growth rate, significantly outpacing overall auto production growth of approximately 1%.

Industrial sector opportunities were also cited as potential growth drivers, with Mizuho pointing to content growth in robotics, AI servers, power and energy applications, and higher iPhone content.

Despite these positive factors, Mizuho expressed concern about 2026 challenges, including a projected 5-7% year-over-year decline in light vehicle production among key European and U.S. customers that represent approximately 70% of STM’s automotive revenue, China’s auto and electric vehicle subsidy reductions, and a muted global industrial recovery.

In other recent news, STMicroelectronics reported its Q3 2025 earnings, surpassing expectations with an earnings per share (EPS) of $0.29, compared to the forecasted $0.23. The company’s revenue for the quarter reached $3.19 billion, slightly above the anticipated $3.18 billion. Despite these positive results, investor concerns arose due to declining gross margins and net income. In another development, TD Cowen adjusted its price target for STMicroelectronics to $25.00 from $27.00, maintaining a Hold rating. The firm expressed concerns over the company’s fourth-quarter 2025 revenue guidance, which predicted a 3% quarter-over-quarter growth. This projection fell short of the mid-single-digit percentage growth that analysts had anticipated. These recent developments highlight mixed investor sentiment around STMicroelectronics’ financial performance and future outlook.

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