DAX 40 company Infineon Technologies AG (DE:IFX) has garnered bullish opinions from analysts after its Q3 2023 earnings announcement last week. The company’s performance for the quarter was in line with its projections, enabling it to reiterate its guidance for fiscal year 2023. The company’s earnings per share (EPS) of €0.68 per share exceeded the consensus EPS projection of €0.62 on TipRanks.
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In the past five days, the shares have lost 1.15% in trading. Overall, in 2023, the shares traded well and have gained almost 20% YTD.
Infineon Technologies is a German semiconductor manufacturing company that serves diverse sectors such as automotive, industrial, telecom, security, and more.
Q3 Numbers
Last week, Infineon announced revenue of €4.1 billion for its third quarter of 2023, which ended on June 30, marking a 13% increase compared to the previous year. The automotive segment accounted for €2.13 billion of the total revenues. The company’s net profit reached €831 million, slightly up from €826 million a year ago.
The segment result, which is a significant measure of profitability for the company, rose to €1.07 billion at a margin of 26.1%. Overall gross margin in the quarter stood at 44.5%, down from 46.6% in the last quarter.
As the demand for chips utilized in computers and smartphones wanes post-pandemic, Infineon is directing investments toward factory expansion in anticipation of heightened demand from sectors like automakers and other industries. The company is focusing on further increasing its production of chips at its manufacturing site in Kulim, Malaysia. This strategic move is aimed at capitalizing on the surge of electric vehicles in the automotive industry. The planned investments for fiscal year 2023 are worth €3 billion.
Regarding the outlook, Infineon aims to achieve revenue of approximately EUR 4 billion in its fourth quarter, along with a targeted segment margin of about 25%. For the full year 2023, the projected revenue is around €16.2 billion, with a segment result margin of 27% and a gross margin of 47%.
Analysts’ Ratings
Over the last week, the stock has received Buy rating confirmations from many analysts. Analysts are bullish on the company’s additional investments, which will further drive its cash flows in the upcoming years and are projected to be fully repaid by 2030.
Among these analysts, Sebastien Sztabowicz from Kepler Capital has predicted the highest growth rate of 61% in the share price. He reiterated his Buy rating six days ago at a price target of €55.
What is the Target Price for Infineon Share?
According to TipRanks, IFX stock has a Strong Buy rating backed by a total of 14 recommendations from analysts. It includes 11 Buy and three Hold ratings.
The average target price is €47.35, which represents a 37.7% change from the current price level.
