STMicroelectronics Stock: 14.68% Drop Over the Week Following Earnings Warning
STMicroelectronics experienced a particularly challenging week on the Paris market. From Monday, October 20 to the close on Friday, October 24, the semiconductor manufacturer's stock fell by 14.68%, closing at 21.56 euros. This correction occurred despite a generally favorable stock market environment, with the CAC 40 gaining 0.45% over the same period.
Sharp Decline Focused on Thursday's Trading Session
The sharp decline was concentrated on the trading session of Thursday, October 23, where the stock plummeted by 14.12% in a single day, dropping from 25.49 euros to 21.89 euros. This drastic fall was due to the publication of the third quarter 2025 results and particularly due to the disappointing outlook. The company mentioned a slow and uncertain recovery in its activities, fueling fears about its recovery trajectory. Trading volumes surged that day, with over 9.4 million shares traded, compared to 2 to 3 million on previous days, indicating a massive sell-off. Over the past year, STMicroelectronics has now declined by 17.18%, highlighting the persistent difficulties of the semiconductor sector in an unfavorable market cycle. Financial analysts, however, maintain an average price target of 27.70 euros, representing a potential increase of 28% from current levels. UBS adjusted its recommendation on Friday, remaining optimistic about the stock despite the correction.
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From a technical standpoint, the stock is now significantly below its 50-day moving average, set at 23.61 euros, confirming a bearish dynamic in the short term. The 200-day moving average is at 23.11 euros, a level that the stock has also breached. The RSI indicator is at 34, indicating an oversold zone but not yet signaling an imminent turnaround. The MACD, slightly positive at 0.02, struggles to establish a clear trend following the sharp correction. The Bollinger Bands currently frame the price between 22.23 euros on the lower bound and 26.71 euros on the upper bound. The stock is trading close to the support level at 21.56 euros, while the first major resistance is positioned at 26.57 euros, the highest level reached at the beginning of the week. The one-month volatility stands at 18.12%, reflecting the magnitude of recent movements. A beta of 0.02 indicates a low historical correlation with the market, although the past week has shown a marked disconnection from the positive evolution of the Paris indices.
« Le chiffre d'affaires du quatrième trimestre a dépassé le milieu de notre prévision et la marge brute a été soutenue par un meilleur mix produit. »
STMicroelectronics a publié ses résultats pour le quatrième trimestre et l'année 2025. Le chiffre d'affaires annuel s'établit à 11,8 milliards de dollars avec une marge brute de 33,9% et un résultat opérationnel de 175 millions de dollars. Le bénéfice net attribuable aux actionnaires pour l'année est de 166 millions de dollars, et le flux de trésorerie disponible (non-U.S. GAAP) pour l'année est de 265 millions de dollars. Pour 2026, le point médian du trimestre est un chiffre d'affaires attendu de 3,04 milliards de dollars et une marge brute d'environ 33,7%.
Risks mentioned
changements dans les politiques commerciales mondiales, y compris les tarifs et barrières commerciaux, susceptibles d'affecter la demande
incertitudes macroéconomiques et inflation, influençant la production et la demande finale
écarts entre la demande client et les projections nécessitant des mesures de transformation
capacité à concevoir, fabriquer et vendre des produits innovants dans un environnement technologique rapide
Outlook / guidance
Expected revenue: Le chiffre d'affaires du premier trimestre 2026 est attendu autour de 3,04 milliards de dollars, en baisse séquentielle d'environ 8,7% et avec une marge brute d'environ 33,7% (plus ou moins 350 pb pour le chiffre d'affaires et plus ou moins 200 pb pour la marge brute).
Management commentary: La direction souligne que les perspectives dépendent des conditions macroéconomiques, des taux de change et du mix produit.
The information presented in this article is provided for informational purposes only and does not constitute an investment recommendation, an incentive to buy or sell a financial asset, or investment advice. Readers are invited to conduct their own research before making any decision.
Investments in the stock market involve risks, including the risk of capital loss. Past performance of an asset or market is no guarantee of future results. Any investment decision should be made taking into account your personal financial situation, objectives and risk tolerance.
