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Investing.com - Barclays (LON:BARC) lowered its price target on STMicroelectronics NV (NYSE:STM) to €20 from €22 on Friday, while maintaining an Underweight rating on the semiconductor manufacturer.
The price target reduction reflects Barclays’ concerns about uncertainties regarding the shape of industry recovery, potential Section 232 risks, and what it considers overly optimistic consensus gross margin expectations.
Barclays based its new price target on a 15x 2026 estimated price-to-earnings ratio, down from its previous 16x multiple and closer to STMicroelectronics’ historical average.
The investment bank estimates STMicroelectronics currently trades at approximately 19x 2026 estimated P/E, which it considers fully valued, suggesting more than 10% downside potential from current levels.
Barclays also cited longer-term concerns related to China, referencing its January 22, 2025, research report titled "What if...China succeeds?"
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