STMicroelectronics Shares Drop 5% Despite Upgrades to 35 and 36 Euros
STMicroelectronics experiences a sharp decline this Friday midday, dropping over 5% in a downward trending Paris market. The semiconductor manufacturer's stock is moving contrary to two significant upward revisions published in the last few hours by Jefferies and Morgan Stanley. The CAC 40 is down 1.12% during the session, at 7,681.98 points.
Current Trading Status
STMicroelectronics is trading around 27.82 euros at midday, down 5.07% from Thursday's close (29.30 euros). This sharp drop brings the price close to its 50-day moving average at 26.98 euros, a technical threshold that could act as a short-term support zone. The identified support at 26.92 euros almost coincides with this level, reinforcing its significance. The stock had reached the upper zone of its Bollinger Bands (30.00 euros) in recent days, before this sudden pullback. The RSI, now at 58, returns to a neutral zone after approaching the overbought threshold, indicating a waning of the recent bullish momentum. Despite this challenging session, the three-month performance remains strong at +26%. The stock also shows a gain of 29.1% over one year, driven by the recovery in the European semiconductor sector. ASML Holding, a comparable sector peer, also fell sharply this Friday, with a session loss of 2.80%.
Analyst Upgrades Amidst Decline
This downward movement occurs paradoxically as two major investment banks have just raised their outlook on the stock. Jefferies upgraded its target this Friday from 29 euros to 35 euros, while maintaining a buy recommendation. The day before, Morgan Stanley had made a double upgrade: from 'market-weight' to 'overweight' and raised the target from 24 euros to 36 euros. At current prices, these two targets imply a potential revaluation of approximately 26% to 29%. The next key event is scheduled for April 23, the date of the first quarter 2026 results announcement. This milestone will allow for an assessment of the group's revenue and margin trajectory, at a time when market conditions for chips remain closely monitored. In the meantime, today's correction fills some of the gap accumulated in recent weeks, without undermining the underlying bullish trend, as the stock remains well above its 200-day moving average (24.19 euros).
