This world leader in semiconductors has been forced to revise its medium-term outlook downwards. Faced with renewed volatility on the stock market, stability has advantages. But not without risk.
A hard blow for this Franco-Italian manufacturer of electronic chips for the telecoms, automotive, industrial and connected objects industries. STMicroelectronics has just given up on the stock market just over 14% in the space of two days following a revision of medium-term objectives. Its ambition to reach a turnover of 12 billion dollars by 2022 has been postponed by one year and the target of the current operating margin from 17% to 19% has been reduced to a range of 15%. and 17%. In question, the dynamics of the automotive market and of the industry affected by the health crisis will not make it possible to compensate for the collateral damage of the Sino-American trade war on the Chinese laptop manufacturer Huawei, a major client of STMicroelectronics since it represents between 5% and 10% of turnover. The problem is that following the restrictive measures imposed by the Trump administration, the Franco-Italian group can no longer work with Huawei. If the quality of STMicroelectronics’ fundamentals and its positioning in promising markets are not called into question in the medium term, the stock should remain under pressure for the time being. Especially since he had had a very good run in recent weeks, going from 24 to 34 euros.
Double or double with stability
In these more uncertain times, stability is an interesting vehicle for hoping to win title money. The selected certificate is issued by Société Générale with a deadline of March 19, 2021 and two terminals located at 22 euros for the lowest and 40 euros for the highest. Its operation is very simple: it will be reimbursed 10 euros at maturity provided that the STMicroelectronics share continues to evolve within the corridor defined by the two terminals. Given its buy price, stability is likely to deliver a 35.1% gain in just over three months. But on the other hand, the risk is not negligible. The certificate will immediately lose all of its value in the event that the share is exited up or down the fluctuation corridor.
Our advice: buy a stability STMicroelectronics issued by Société Générale (code: LU2088857664); deadline: March 19, 2021; terminals: 22/40 euos; price: 7.40 euros; amount: 1