Deutsche Bank and UBS raise price targets...

Deutsche Bank has reaffirmed its 'buy' rating on STMicro, raising its price target from 42 to 52 EUR, following the announcement of a first quarter that outperformed seasonal norms and a strong outlook for the second quarter.

The German bank expects the chipmaker to approach 4 billion USD in quarterly revenue next year, which should allow it to reach an adjusted gross margin of nearly 40%, compared to a range of 34-35% in the first half of 2026.

According to Deutsche Bank, this should lead to a return to operating margins in the 'mid-teens', up from approximately 5% in 2025, despite the sharp increase in operating expenses this year, and a near-doubling of EPS next year.

For its part, UBS maintains its 'buy' recommendation on the Franco-Italian group's stock, with its price target raised from 31 to 49 EUR, a target representing 14% upside potential relative to the previous day's closing price.

Following the solid results unveiled for the first quarter of 2026, the Swiss bank is upgrading its estimates for the group, believing that 'we are still only at the beginning of an upgrade cycle'.

... as does Oddo BHF

Similarly, Oddo BHF reiterates its 'outperform' rating with a price target increased from 40 to 50 EUR, noting a 'very positive message regarding the dynamics of the markets in which STM is positioned, including industrial and even automotive'.

In addition to these markets, which still represent 70% of its business and have hit cyclical lows, the research firm also highlights the emergence of datacenters and satellites, which are expected to accelerate sharply.

It now forecasts annual growth of 20% for the group in 2026 and considers the 18 billion USD revenue target for 2028 to be 'attainable once again'. Also confident in STM's ability to improve margins, it has adjusted its forecasts upward by an average of 5%.

The stock is trading at 11 times forward 12-month EBITDA, above its historical average of 8 times, which Oddo BHF finds 'still very attractive, given the growth prospects for 2026 and beyond, despite the year-to-date performance (+90%)'.