STMicroelectronics initiated with an Outperform at Bernstein

Bernstein analyst Sara Russo initiated coverage of STMicroelectronics with an Outperform rating and EUR 45 price target as she starts coverage of the European semiconductor sector following significant de-rating in 2022. The analyst notes that the year is starting with an expected sharply lower WFE spend and uncertain economic conditions that are likely to impact the broader semi market. However, a bounce back on capex in 2024 and strong secular growth drivers lead her to believe there is more to like in European semiconductors than the market is giving them credit for. Russo highlights that STMicroelectronics is a leader in Silicon Carbide for electric vehicles and 5th overall in auto semis market share. However, STMicroelectronics is not as strong on SiC technology leadership and more aligned to consumer markets, leaving them more exposed to a 2023 downturn, she adds.