Technology / Semiconductor / Internet Research

Nicolas Baratte

Nicolas Baratte has been a financial analyst since 2000, covering the Semiconductor sector and Global Technology. Nicolas has worked on the sell-side for JPMorgan, CLSA. On the buy-side for a Tiger fund and Prudential. Nicolas has covered semiconductors, Asian hardware and components, and the Global Tech supply chain. Nicolas lives mostly in Taiwan, sometimes in France and is in New York regularly.

STMicro (STM): Can It Get Any Worse? Yes, It Will in 1Q25. Let's Wait for that Reset.

Equity Bottom-Up

<ul>
<li>Very poor 1Q25, operating profit close to zero. 2Q a bit better with lower revenue decline, but OP still close to zero.  </li>
<li>Management claims 1Q is the bottom for revenues, its possible, but 2 large risks: restructuring costs and very high inventories.</li>
<li>Consensus expects a slow recovery into 2026, the stock looks cheap at 11x 2026 EPS. However, given the firm’s track record and the risks mentioned, lets wait 1 more quarter.</li>
</ul>


Very poor 1Q25, operating profit close to zero. 2Q a bit better with lower revenue decline, but OP still close to zero.  
Management claims 1Q is the bottom for revenues, its possible, but 2 large risks: restructuring costs and very high inventories.
Consensus expects a slow recovery into 2026, the stock looks cheap at 11x 2026 EPS. However, given the firm’s track record and the risks mentioned, lets wait 1 more quarter.


STMicro: Ugly but Mngt Says 1Q25 Is the Bottom. Restructuring Has to Start, Horrendous Inventories.

STMicroelectronics NV

STMicro: Ugly but Mngt Says 1Q25 Is the Bottom. Restructuring Has to Start, Horrendous Inventories.