STMicro Earnings: Silicon Carbide Opportunities Remain Promising; Shares Undervalued

Narrow-moat STMicroelectronics reported solid first-quarter results and provided investors with a healthy forecast for the second quarter and all of calendar 2023, as the company remains well positioned to prosper from resilient chip demand in the automotive and industrial end markets. We maintain our $59/EUR 55 fair value estimate and view the company as undervalued. The shares dipped by as much as 9% after the release, which we suspect was a response to lower revenue coming from Apple later in the year, but we view the April 27 selloff as overdone.