Piper Jaffray Initiates Coverage on STMicroelectronics (STM) with an Underweight; Valuation Unattractive
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Piper Jaffray initiates coverage on STMicroelectronics (NYSE: STM) with an Underweight rating. Price target €5.5
Piper analyst says, "The primary reason for our negative stance on the shares is: a) the group's lack of focus and b) our skepticism about management's ability to raise margins to a level that would justify a re-rating of the shares. This is an abridged version of a longer report also published today...Valuation is not attractive: Although the shares have underperformed the SOX index, we do not believe valuation is attractive. The shares are trading at a 2011 PE of 18.4 times on consensus estimates, a premium to the sector on 16x and Texas instruments on 12.8x. Our 12-month target price of €5.5 is based on 15x our 2011 adjusted EPS of US$0.55. We initiate coverage with an Underweight rating and see better value elsewhere in the sector."
To see all the upgrades/downgrades on shares of STM, visit our Analyst Ratings page.
STMicroelectronics N.V. is a global independent semiconductor company that designs, develops, manufactures and markets a range of semiconductor products used in a range of microelectronic applications, including automotive products, computer peripherals, telecommunications systems, consumer products, industrial automation and control systems.
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