Day of passion for STMicroelectronics, which collapses on Piazza Affari after the publication of the quarterly results. The stock, today the worst in the FTSE MIB basket, maintained a significant loss of 12.8% at 22.26 euros per share in the afternoon. Trades were also rather voluminous with over 19 million shares traded, against a daily average which generally does not exceed 5 million shares.
The cut in investments also contributed to penalizing the stock, with capital expenditure reduced to under 2 billion dollars for 2025, lower than the 2-2.3 billion indicated previously.
Quarterly results in decline
The Italian chip company closed the third quarter with net revenues of $3.19 billion, a decrease of 2% compared to the previous year.
Gross profit amounted to $1.06 billion, representing a year-on-year decline of 13.7%. The gross margin stood at 33.2%, 30 basis points below the intermediate value of the guidance and a decrease of 460 basis points compared to the previous year. Operating profit decreased from $381 million to $180 million.
Net income and earnings per share after dilution decreased to $237 million and $0.26 per share, respectively, compared to $351 million and $0.37 in the same quarter last year.
The guidance disappoints expectations
The guidance for the fourth quarter of 2025, at intermediate values, indicates net revenues of $3.28 billion, equal to an increase of 2.9% on a sequential basis and a gross margin of 35%, including approximately 290 basis points of charges from underutilization of production capacity.
The forecast – explains the company – is based on an assumed effective euro/dollar exchange rate of approximately 1.15 and includes the impact of existing hedging contracts, while it does not include any impacts due to potential further changes in global trade duties compared to the current situation.
The midpoint of this forecast translates into annual revenues of approximately $11.75 billion for 2025. This represents a 22.4% increase in the second half compared to the first, confirming signs of market recovery. Gross margin is expected to be around 33.8%.
Analysts’ opinions
After the calculations, Barclays appeared to be the most demanding and confirmed the “Underweight” rating on the STM stock while raising the target price to 22 euros from the 20 indicated in July. “Revenue forecasts are weak, which will disappoint,” analysts say, “but it is positive that gross margins are in line this quarter.” “We believe that the revenue forecasts do not take into account any increases in revenues in 2026, which increases uncertainty about the recovery,” conclude the experts from the British investment bank.
“Sales indications confirm… that, although the sector is recovering, the growth cycle has slowed significantly,” JP Morgan analysts noted in a note.
For Equita, “the outlook for the 4th quarter confirms a good sequential improvement in the margin (35% gross margin, as expected by us and the consensus) despite slightly lower revenues (-0.6% compared to our estimates, -2% compared to the consensus) and with still 290 bps of unused capacity charges (an element we expect to reduce in 2026 in a scenario of recovery of revenues and efficiencies)”. We believe that the trend in margins provides more visibility to the progression we incorporate for 2026: our estimate is 37.3%, that of the consensus at 36.8%, while our turnover estimates, +15%, and the consensus, +13%, for 2026 appear only partially visible in light of the more cautious messages from competitors, especially on the more cyclical, therefore auto/industrial, part. Therefore we see no room for a re-rating of the stock on the stock exchange from these levels: 2026 p/e multiple of 22 times”.
