Berenberg says ‘time to revisit’ shares of Infineon and STM

Berenberg lowered the firm’s price target on Infineon (IFNNY) to EUR 45 from EUR 46 and keeps a Buy rating on the shares. The analyst believes it is “time to revisit Infineon and STM (STM)” as the semiconductor market is “not too far from recovery.” Both share prices have performed poorly this year over concerns about auto and industrial semiconductor market potential weakness, the lack of a consumer semi end market recovery and China’s aim to push local auto makers into switching to domestic suppliers, the analyst tells investors in a research note. The firm believes the negative industry end market trend is already known at this point and priced into the shares. It thinks concerns about China auto semi localization is overdone and expects Chinese auto makers continue to use a mix of domestic and international chip suppliers. In the coming years, Berenberg believes auto semi content growth will continue to be driven by the continued penetration of electric vehicles and advanced driver assistance systems. Infineon and STM both have an extensive range of solutions for different auto end-market applications, and are set to benefit from this growth, says Berenberg.