PARIS (dpa-AFX) – The big bank Société Generale (SocGen) looks black given the rapid recovery of Infineon's operations with the automotive industry and now recommends selling the shares in the chip manufacturer. The end market is stubbornly negative, analyst Aleksander Peterc wrote in a study available on Wednesday. Again this year, he will stay in a deep recession and at best stay at this level in 2020. Peterc therefore reduced his estimate for the car industry particularly clearly. With stagnant profits, Infineon paper is highly ranked in the industry comparison, which means additional price risks, so the expert.
The investment decision for Infineon lowered Peterc from "Hold" to "Sell" and limited its price target from € 1
It is not just the vehicle segment itself that is worrying the expert because of the weakness of the entire automotive industry. "We are also afraid that our view of the coming twelve months will be hampered by the integration of our acquired US competitor Cypress and related, unspecified restructuring costs." As soon as this expensive acquisition is completed, the semiconductor manufacturer's debt is likely to increase significantly, "and all this in the midst of an investment halt," Peterc wrote, reminiscent of the costly building of a 300mm chip factory in Villach, Austria.
A quick resolution of trade dispute between Peterc, on the other hand, the US and China could lead to a significant recovery from chip manufacturers, including Infineon. But he did not take that into account in his current estimates.
Rather, he reduced his earnings per share estimates to 2023, each in the middle to high-figure percentages. In particular, he used the red pen for his estimates of the automotive sector.
According to the assessment "Sell", SocGen analysts expect the stock to show an absolute loss over twelve months (price development + dividend) ./g/gl/fbaebrit19659007achteAnalysinstitutet Société Generale SA
Publication of the original study: 16 / 02:45 / CET First distribution of the original study: Date not specified in the study / Time not specified in the study / Time zone not included in the study