STMicro: Shares Undervalued as Its CES 2024 Demonstrations Leave Us Impressed

We visited STMicro’s product demonstrations at CES 2024 and remain confident in the health and innovation of the company’s broad product portfolio across analog, microcontrollers (MCUs), digital processors, and power semiconductors, including wide bandgap semis with improved performance, such as power products based on silicon carbide (SiC) and gallium nitride (GaN). We maintain our fair value estimates of $66 and EUR 63 for narrow-moat ST and continue to view shares as undervalued. Although we see cautionary signs in automotive semis, such as Mobileye’s recent earnings warning, we still foresee ST as a long-term, secular winner in auto, particularly in SiC.