STMicroelectronics has published strong results. The Q3 results came broadly in line with consensus, and slightly better in profitability. The positive news comes from the rise in the sales guidance and in the Q4 expected gross margin, to its highest level. Supply constraints in Malaysia due to the pandemic continue to be a headwind.
Companies: STMicroelectronics NV
STMicroelectronics published very impressive results and bettered their outlook for FY21. There is strong growth in demand from all end-segments, which increases sales and margins for the coming quarters. STM is working on increasing capacity to answer the current demand.
STMicroelectronics has shown solid figures, boosted by its Automotive and Industry segments. The demand for its chips is still strong as customers want to replenish their inventories. The rumour about Apple replacing STMicroelectronics as a supplier made the stock price hesitate in past weeks, and the guidance has restored confidence.
ST released its Q4 20 figures, which were in line with preliminary estimates for revenue, and consistently above estimates for the profitability figures as these were fuelled by strong demand in almost every product category (except for RF Communications). Q1 20 guidance is above consensus, while the most promising figures are at the capex level, which were well above the street.
ST held the fourth presentation of its 2020 CMD focusing on its strategic update. Overall, the predominant feeling was somewhat of deception as the revenue guidance suffered from US/China trade tensions beyond previous estimates, amongst the negative market evolution. This will put pressure on margins for the next three years. Nonetheless, we maintain a positive opinion in the longer run as we believe the company could overcome this challenge organically through strategic adaptations or M&As.
STM’s Q3 results were roughly in line with estimates, with a marginal disappointment for the bottom line. Nothing exciting at this stage, apart from the better outlook for Q4 which may exert upwards pressure on the consensus. We maintain our positive view on the stock.
Jean Marc Cherry, STMicroelectronics’ CEO, spoke at Citi’s 2020 Global Technology Virtual Conference today (09/09/2020). Overall, the message provided by the CEO was very reassuring, with STM reconfirming each of its financial targets for FY20 as well as mid-term objectives. In addition, the company is seeing improving signs in both the automotive and industrial end markets.
STM published a sound set of results for Q2, ahead of both guidance and estimates. Most importantly, the company provided strong Q3 guidance and revised upwards its FY20 guidance on the back of customer engagements and improved market conditions in Auto and Industry, as well as the build-up ahead of 5G-ready smartphone launches in H2. We maintain our positive view on the stock and we have raised our estimates by c. +11%.
STM revenue came in c. 5% below the mid-point of guidance, suffering from early COVID-19 impacts, but the AMS segment helped offset this. Q2 will be the most challenging quarter, but the company maintained its FY objective, having secured already a significant share of its H2 growth.
STM released another strong quarter, with every metric above guidance and expectation for this Q4, the best surprise for us coming at the profitability level. Going forward, STM expects to return to solid growth in 2020, although the next three months should be decisive in confirming this trend. We shall be upgrading our forecasts and see many catalysts for the stock in 2020.
STM’s Q3 publication was reassuring, in line or slightly above expectations for the Q3 numbers, while STM was a bit more bullish for Q4. As a result, AMS has been the main growth contributor while Automotive’s recovery turned to be weaker. However, the company managed to protect is profitability well and guided to above consensus for Q4 19.
STM has reported solid figures during Q2 and growth is expected to accelerate over the second half of the year. Despite this, the company has trimmed its revenue guidance by 1.3% on the back of a softer than expected recovery. However, we continue to recommend STM as we believe the company is suited for long-term growth while offering a discount compared to its peers.
STM presented its CMD, the occasion for the company to share its strong confidence in its ability to fulfill all its guidance for 2019. As expected, this performance will be achieved thanks to good developments in Automotive, Industry, and new platform launches in Smartphone. The main surprise has been the ambitious mid-term targets which have been provided. STM is on its way to transforming a wobbly situation in 2015 to a much brighter financial performance.
STM missed the lowest top-line estimates but managed to protect its profitability. The key message of this presentation has been management’s view regarding the expected recovery in Q2 as well as the growth acceleration in H2.
STM delivered a solid performance over Q4, in which we witnessed an expansion of profitability and cash flow from operations. We see a little disappointment in the outlook as the company’s guidance for Q1 19 was worse than expected. However, the analysts conference call that followed gave a very bullish view for the year to come.
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Friday's market sell off saw some violent downward moves in many stocks with little initial differentiation between sectors or the key drivers of businesses, creating significant share price drops in a number of higher quality or uncorrelated names. We take a look at some stocks we believe have either seen an unwarranted sell-off, have seen weakness go under the radar or where there is now a more attractive opportunity.
Companies: ANX IBPO CYAN SOM EQT AFM
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Trinistar Liverpool S.a r.L announces its potential listing of a newly formed single asset company which will own the Capital Building in Liverpool on the IPSX. Upon admission the Company would become a real estate investment trust (REIT). The Capital Building occupies close to a 3.5 acre freehold site in the centre of Liverpool’s business district; the building comprises c425,000 square feet of predominantly of
Companies: ADBE ADBE SYM ARC AVCT CMCL CLIN DCTA FRAN OSI
Gresham has won an extension and expansion deal with a long-standing Tier 1 investment bank customer as it continues to standardise on the Clareti platform. Including this and other deals, current ARR rises to £23.3m, a 5% organic uplift from end June. Clareti/Electra are trading in line, though Gresham flags potential for further new business in FY21 and an “encouraging pipeline” for FY22. Non-Clareti revenues are performing ahead of expectations leading us to upgrade FY21 revenues and adj. EBI
Companies: Gresham Technologies plc
Adjusted EBITDA growth of +19% YoY in H1A reflects both higher margins and higher quality revenues. The Group now has 50%+ visibility over H2E revenues. This year will be second half weighted too but returning momentum post COVID-19 means the business is now in a much stronger position. Fair value lies in excess of twice the current price. Buy.
Companies: Shearwater Group plc
GB Group (GBG) has announced a conditional agreement to acquire Acuant, a leading player in the US identity verification market. At an enterprise value of £547m, it marks GBG’s largest acquisition to date. The deal strengthens GBG’s position in the US, broadens its product offering and accelerates its technology roadmap. We have revised our forecasts to reflect the placing and the acquisition and our normalised EPS forecasts decline 3% in FY22, are flat in FY23 and increase 3% in FY24.
Companies: GB Group PLC
Arcontech has announced that its trading performance is below current market expectations due to one customer reducing its market data spend with the company, and notification from another customer that it will not be renewing its contract from the start of H2 22. The two changes are unrelated and do not involve customers with Arcontech’s core MVCS server-side solution. They instead reflect one customer greatly scaling back its market data team and market data requirements, and a second choosing
Companies: Arcontech Group PLC
TPXimpact has released a very strong set of interims that were well ahead of our forecasts, and which firmly underpin our FY estimates. Revenues leapt +77% to £37.5m (DCe £33.9m) with organic growth of +21% fortified by acquisitions. Gross margin was down -4pts to 31% though this reflected a change in business mix and a temporary increase in use of contractors rather than wage inflation and the group expects to rebuild gross margin going forwards aided by the centralised recruitment benefits fro
Companies: TPXimpact Holdings PLC
MCB acquisition announced: Snap reaction
Companies: Glantus Holdings PLC
This has been a notable half for D4t4; its markets continue to recover from the pandemic, leading to a fine trading performance marked by a raft of new contract wins; management has been refreshed, with an experienced and dynamic new team taking the helm; the geographic expansion into the US and APAC continues; a stream of software updates will maintain Celebrus market leadership; a small consultancy acquisition hints at a more direct market approach in future; and the launch of the exciting fra
Companies: D4t4 Solutions plc
First Property announced interim results that underline the opportunity to grow rental income and capital values over the next 12 months. With cash to invest on behalf of both the Group and its fund management clients, there is scope for earnings growth. With capital values generally rising after the lockdown induced lows, we expect NAV expansion
Companies: First Property Group plc
Intuit continued with its exceptional run and had a robust fourth quarter capping off an exceptional year. Their full-year revenue increased by a staggering 25%, including the addition of Credit Karma with the fourth quarter alone contributing $2.6 billion to the top-line. The biggest drivers of the top-line growth are the Consumer Group segment which grew by 16% and the Self-Employed Group which grew by around 14%. These have wonderfully complemented the company’s core QuickBooks Online offerin
Companies: INTUIT (INTU:NYSE)Intuit Inc. (INTU:NAS)
Arrow Exploration Corp. (AIM:AXL; TSXV:AXL), the high-growth operator with a portfolio of assets across key Colombian hydrocarbon basins, has joined AIM, alongside a fundraise of approximately £8.8m.
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ATOM headquartered in Leeds, focussed on the large-scale production of green hydrogen and ammonia intends to join AIM towards the end of the year. ATOME intends to be spun-out from AIM-listed President Energy Plc, an oil and gas com
Companies: SPA ECR KP2 SAR SYM
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Hostmore plc (MORE.L) has demerged from Electra Private Equity PLC, and the shares admitted to the Premium Segment of the Main Market.. Hostmore is a growing hospitality business with its current operations focused on the American-themed casual dining brand, Fridays, and the cocktail-led bar and restaurant brand, 63rd+1st.
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Ashtead Tech, subsea equipment rental and solutions provider for the g
Companies: VAL ALNOV GMR
iEnergizer has reported interim results significantly ahead of expectations, supporting our view that the Group is entering a period of outsized growth and new business wins which will scale rapidly to the short and long term benefit of shareholders. With very attractive financial characteristics and inexpensive valuation, there are significant capital and income returns on offer. Buy
Companies: iEnergizer Limited
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