Yesterday, Germany-based Siltronic AG (DE:WAF) unveiled its strategy update and anticipates significant growth in its sales and profits by 2028. The group expects its sales to surpass €2.2 billion and its EBITDA margin to reach the high 30% range in the next five years. Compared to the company’s sales forecast for 2023, this indicates growth of more than 40%.
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Siltronic, which specializes in silicon wafer manufacturing, is a key supplier to the semiconductor industry. The company attributes its sales boost to the growing adoption of artificial intelligence (AI), digitization, and electromobility, which drive a robust demand for semiconductors and wafers.
Looking ahead to 2024, Siltronic sees some challenges, like lower demand due to the already high level of inventories at chip manufacturers. Moreover, the margin will also be impacted due to costs associated with the new production site in Singapore.
In the longer term, the anticipated volume growth and cost efficiency will drive profitability for the company.
Siltronic’s share price is trading down by 5.8% today at the time of writing.
Analysts’ Reactions
Despite the solid growth story presented by the company, some analysts were not convinced about the potential for share price appreciation.
Post-update, analyst Tim Wunderlich from Hauck & Aufhaeuser reiterated his Sell rating on the stock, predicting a downside of 38.5%. Similarly, UBS analyst Francois Xavier Bouvignies maintained his Hold rating, predicting a modest downside of 8%.
On the contrary, Jefferies analyst Constantin Hesse confirmed his Buy rating on the stock at a price target of €105. This implies a growth potential of 28% in the share price. Even though Hesse stated that the guidance was below expectations, the numbers present a “solid positive trend” for the demand for wafers.
Siltronic Share Price Forecast
According to TipRanks’ consensus, WAF stock has received a Moderate Buy rating based on recommendations from eight analysts. This includes five Buys, two Holds, and one Sell. The share price forecast is €90, which is 8% higher than the current price level.
