Analyst Note| Brian Colello, CPA |
Narrow-moat Infineon Technologies reported strong fiscal fourth-quarter results and provided investors with an upbeat forecast for the December quarter and for fiscal 2022 (ending September 2022). Infineon should continue to see robust demand in the near term amid the global semiconductor shortage, which should lead to healthy chip pricing and strong gross margins as the company fully utilizes its existing capacity and strives to bring more capacity online. We raise our fair value estimate to EUR 40 from EUR 34, thanks to both the strong near-term results and as we update our valuation model for the time value of money. Shares appear fairly valued to us.