On Friday, Citi revised the price target for Aixtron SE (AIXA:GR) (OTC: AIXXF), a provider of deposition equipment to the semiconductor industry, to €23.00 from the previous €26.00. Despite the reduction, the firm continues to recommend a Buy rating on the stock.
The adjustment comes after Aixtron's second half of 2024 performance, which aligned with expectations except for weaker-than-anticipated orders and resulting uncertainty about the company's prospects for 2025. Gardiner notes that Aixtron's outlook for a slight dip in sales for 2025 has led to a more conservative view of next year's equipment revenue, which is currently estimated to be about 40% booked and projected to reach two-thirds by the end of the year.
Gardiner suggests that the revised estimates represent a realistic adjustment, potentially marking a low point in negative forecast revisions. While acknowledging the short-term challenges faced by Aixtron, including weak sentiment pending a substantial improvement in power semiconductor tool orders, the analyst expresses confidence in the long-term growth potential of compound semiconductors and Aixtron's significant role in this market.
The new target price of €23 is a consequence of lowered revenue expectations, yet Citi maintains its positive stance on Aixtron, emphasizing the company's strategic position in the evolving semiconductor industry.
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