On Tuesday, Berenberg increased its price target on shares of Soitec (SOI:FP) (OTC: SLOIF) to EUR 130, up from the previous EUR 110, while reiterating a Buy rating on the stock. This adjustment comes despite Soitec's management reporting a weak first quarter in sales.
Soitec, a company specializing in semiconductor materials, has experienced a downturn in sales at the beginning of the quarter. Berenberg anticipates that this decline will stabilize in the second quarter and projects a resurgence in growth in the latter half of the year.
The firm's outlook is based on the expectation that customer destocking will cease and, coupled with a weak comparison base, will set the stage for a robust expansion in 2026. Berenberg's forecast hinges on the potential for strong growth and the company's ability to leverage its operations effectively.
The updated price target reflects Berenberg's confidence in Soitec's valuation. The firm suggests that the current valuation is compelling, considering the anticipated growth and operational leverage that Soitec is expected to achieve.
Investors and market watchers will be keeping a close eye on Soitec's performance in the coming quarters, as the company aims to navigate through the current slowdown and emerge with stronger sales momentum heading into the second half of the year and beyond.
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