Quick Silver: STM (N; TP €71) | Feedback & Thoughts

研报英文原文证据摘录

Quick Silver: STM (N; TP €71) | Feedback & Thoughts

rically traded at a meaningful discount to Infineon. The core bull case has centred on the company

delivering roughly €4 of EPS by 2028, with many investors arguing the business deserved to re-rate towards an Infineon-

style ~20x multiple, implying a €90-100 stock. Following another quarter of disappointing execution and communication,

investors are increasingly questioning whether that premium is justified, or whether STMicro should instead command a

more traditional mid-teens multiple. Applying a 15x multiple to the same €4 EPS framework points to a valuation closer to

€60 which makes the upside hard to frame. To be clear, the long-term growth drivers remain more attractive than they were

historically, particularly around AI infrastructure and LEO satellite content, which arguably support a structurally higher

valuation. The problem is credibility. Investors continue to feel management over-promises and under-delivers, repeatedly

setting expectations too high whilst on the road before failing to meet them at results. Last quarter gave the impression the

company had turned a corner, with a more promotional message ultimately backed up by execution. Unfortunately, this

quarter feels like a return to old habits, and until management consistently delivers against its own messaging, many

investors (especially LO’s) are likely to remain reluctant to award STMicro the premium multiple the bull case requires. So

the question is, when the dust settles and the calmer markets (and minds) prevail, will STM look more interesting when the

re-grossing trade occurs?

TMT FLOW + THOUGHTS

This morning’s earnings have reinforced just how difficult the current tape remains. Perhaps the biggest surprise has been Nokia’s