Soitec Earnings: Trimming Fair Value Estimate to EUR 180 on More Uncertainty Over 2026 Guidance

We were not surprised by narrow-moat Soitec’s downward revision of its annual guidance as we had previously indicated its revenue outlook for fiscal 2024 seemed slightly optimistic. Management now expects total revenue to be down by mid-single-digits organically, compared with the previous estimate of flat growth. The outlook reduction mainly comes from the smartphone market, which is taking longer to recover than management had expected. In any case, we expect a healthy rebound in smartphone sales in fiscal 2025 due to volume recovery and more silicon-on-insulator content per device. We are trimming our fair value estimate to EUR 180 from EUR 190 after lowering our medium-term assumptions over the uncertainty of Soitec’s ability to reach its medium-term guidance. Shares remain slightly undervalued.