Infineon Earnings: Shares Remain Undervalued as Automotive Revenue Will Be Resilient

Infineon reported solid fiscal fourth-quarter results and provided investors with an upbeat forecast in fiscal 2024 (ending Sept. 24), despite some near-term weakness in certain end markets. Importantly, the secular tailwind of rising chip content per car (especially in electric vehicles) appears to be full steam ahead, as management expects low-double digit revenue growth next year even if global light vehicle unit sales are flattish in 2024. We raise our fair value estimate to EUR 50 from EUR 47 as we adjust our near-term and long-term profitability assumptions. Shares still appear undervalued to us, and we remain fond of Infineon's opportunities within the electrification of vehicles and its exposure to EVs.