(BFM Stock Exchange)-The bank has noted its advice on purchase on the Franco-Italian group of semiconductors. Jefferies estimates that the group’s growth will accelerate the second half, benefiting from a resumption of demand on the side of its industrial customers but also an iPhone 17 which will take more technologies than the iPhone 16.

With Stmicroelectronics, the disappointments have been quite numerous in recent months. For several quarters, investors have been looking to position themselves on the resumption of growth, and have been waiting for the company to reach a low point.

Their patience was put to the test. Last year, the Franco-Italian semiconductor manufacturer has repeatedly lowered its annual objectives. Then, during the publication of its 2024 results in late January, the group delivered disappointing prospects for the first quarter of 2025. This is still due to a slowdown in demand in the automobile and other industrial customers .

The stock market price has unscrewed more than 10% during these announcements. More broadly, the action plunges more than 40% over a year.

Jefferies, however, sent a huge message of trust on the title this Wednesday, February 19. The bank has noted its recommendation for purchase, against “keep” previously, while enhancing its price target at 34 euros against 23 euros before. This new target gives a potential of 47% to the action during Tuesday closing.

On the Paris Stock Exchange, this recovery of recommendation is well followed. The title Stmicroelectronics earns 6.6% this Wednesday around 3:30 p.m. and signs, by far, the highest increase in CAC 40.

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The hollow of the wave is near

For the past three years, Jefferies have not recommended to buy the action, with advice to “underperformance” either to “keep”. The bank judges that it is now time to position itself on the title, which currently knows “its darkest hours before the dawn”, she wrote.

The design office estimates that the reduction of semiconductor stocks that occurred in the automobile and industry, in the latter quarters, will reach its peak in the first quarter of 2025. A slight rebound will then occur in the second quarter before A more pronounced recovery in the second half of 2025.

Beyond this recovery, a key factor in improving growth and margin in the second half of Stmicroelectronics remains the iPhone 17, which must be announced in September.

Stmicro does not communicate its exposure to Apple but analysts know that the apple group remains one of the biggest, if not the biggest customer of the Franco-Italian company. Jefferies Cigs this exhibition around a “low teens” rate, between 10% and 12% (against almost 24% in 2020).

This figure should go back with the iPhone 17. The next Apple phone should take more content and high technology components, Estem Jefferies. Compared to the iPhone 16, the gap would be at 3 dollars per device, assesses the bank.

The design office evokes the integration of a “Metalens” lens, very fine and capable of better capturing light, for “Face ID”, the Apple facial recognition system.

Stmicroelectronics would provide more Apple components to be able to set up this technology. Jefferies figures an impact of 200 million to $ 300 million in 2025 then $ 400 million in 2026.

Satellites and “edge ai”

Jefferies also expects the revenues of Stmicroelectronics from its products for satellites with low terrestrial orbit (Leo) to accelerate. In 2024, these revenues established $ 500 million, almost exclusively from Starlink, Space X company. The bank estimates that this figure will increase to $ 900 million in 2027, with in particular more request from Starlink But also from Kuiper, the constellation of Amazon satellites.

In addition, with the rise of the Chinese start-up Deepseek, which has developed models of efficient artificial intelligence (AI) and, a priori, at low costs than those of large American groups, another wind carrier will blow for Stmicro.

The least IA development costs “should result in a faster proliferation of the EDGE AI (AI on the outskirts, inside connected objects, editor’s note) in industrial and general public applications”, And therefore by reinforced demand for the microcontrollers of the Franco-Italian company, anticipates Jefferies.

For all of these reasons, the bank expects Stmicroelectronics to have an appreciation of its multiple scholarship holders in the coming months. The title is currently exchanging around 12 times its profit per share expected in 2026 against a historic average out of seven years of 18 times. This while “we are at the start of a new growth cycle in the automotive and industrial semiconductor sector”, insists Jefferies.