STMicro Confident of 2023 Auto and Industrial Revenue Growth; Raising FVE to $59/EUR 55

Narrow-moat STMicroelectronics reported solid fourth-quarter results and provided investors with a surprisingly rosy forecast for the first quarter and all of 2023. We're raising our fair value estimate to EUR 55/$59 from EUR 50/$50 based on the time value of money as we roll our valuation model, but also because we see a clearer path to ST achieving its key long-term targets of $20 billion of revenue and 50% gross margins. The shares are up about 8% after the release, but we still see an attractive margin of safety for investors.