X-Fab: Deutsche Bank cuts target price

(CercleFinance.com) - On Tuesday Deutsche Bank lowered its target price for X-Fab shares from E12 to E10, while renewing its buy rating on the semiconductor specialist's stock.


The analyst is surprised that the foundry has unveiled a 3-year, E1bn investment plan when it expects only 3% business growth this year.

These plans mean that its capital expenditure is set to jump by 63% in 2024, a budget that the broker considers an anomaly at a time when automotive and industrial groups are planning to reduce their purchases by 16% this year due to the correction currently affecting inventories.

In its view, changes in financial conditions or demand should eventually curb its ambitions and cause market disappointment, given that the company is targeting E1.5bn in annual sales by 2026.

Even assuming a slowdown in sales or capacity growth, the share price does not include the transformation currently signed by the company.


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