Analyst Note| Brian Colello, CPA |
Narrow-moat STMicro reported solid fourth-quarter results with top and bottom lines significantly up sequentially and year over year. The company saw a strong rebound in automotive chip demand, in light of supply constraints seen across ST’s peer group, while the firm also prospered from a recovery in industrial chip demand and higher content within Apple’s latest slate of iPhones. We are raising our fair value estimate for ST to EUR 28 from EUR 27 (and to $35 from $33 for the U.S. ADR). Despite the strong results, we view ST as modestly overvalued.