STMicroelectronics Shares Plunge Over 5% After a 139% Rally in Three Months
The Franco-Italian semiconductor manufacturer is experiencing a sharp profit-taking after a spectacular rally. The stock is significantly retracting as technical indicators signaled a state of extreme tension. However, UBS has just significantly raised its price target.
STMicroelectronics fell by 5.29% to €64.87, lagging behind the CAC 40, which gained 0.87% at midday. The decline follows an extraordinary stock market performance: +40.98% over one month, +139.2% over three months, and +189.3% over a year. The stock remains far above its long-term moving averages, with a gap of more than 124% compared to the MM200 at €28.90. An RSI of 82 confirms the accumulated overheated state. Today's session does not challenge the underlying bullish momentum, but the magnitude of the quarterly gain made a consolidation likely. The stock has returned to its resistance level at €68.49, now breached upwards then tested downwards. The support threshold is far below, at €37.46.
UBS Raises Target Price
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UBS has increased its target from €49 to €80 and has upgraded the stock to buy, representing a potential of about 23% relative to the current price. This revision follows recent upgrades by several firms after the company announced on Tuesday a raised ambition to $1 billion in revenue for data centers by 2026, with a potential doubling in 2027. The sector context remains mixed during the session: ASML is down 2.28%, ASM International 3.5%, while Nvidia falls 3.62% on Wall Street. According to the consensus of analysts surveyed, the stock is trading at about 61.8 times the earnings expected for the current fiscal year and 33.1 times those of 2027, multiples that reflect the extent of the revaluation since February.
Jean-Marc Chéry, Président du Directoire et Directeur Général de ST, a déclaré :
Risks mentioned
Diminution des charges liées aux capacités non utilisées.
Changements éventuels des tarifs douaniers globaux.
Opportunities identified
Contribution de l'activité capteurs MEMS de NXP au chiffre d'affaires net.
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