St. Louis hit by selling, Nasdaq weighed down by uncertainty over 2026 costs

 (Il Sole 24 Ore Radiocor) - The shares of Stmicroelectronics, which had made a good start at the beginning of the session after the fourth-quarter results, ended up under fire. However, the "flare-up" was short-lived, with the shares gradually losing ground to the bottom of the FTSE MIB. The reason for this was the Nasdaq's sharp decline on Wall Street, but also the market's doubts about the costs of the Italian-French semiconductor group.

After a sprint in the first part of the session, encouraged by fourth-quarter revenues and an outlook for the first period of 2026 judged by analysts to be 'slightly better than expected and seasonally adjusted', the stock reversed course. CEO Jean-Marc Chery actually said he was 'confident in the group's ability to grow organically during the year, we have better growth drivers than the market and we are in a better position than last year'. Analysts, however, point out how the market, upon closer inspection of the results, has mainly focused on a couple of negative aspects: the first is that the company explained that the restructuring costs, linked to the announced reshaping of capital expenditures and assets with a view to efficiency, may also have an impact on this year's accounts, after having already weighed in at USD 141 million in the fourth quarter. The second aspect is that, as Citi analysts point out, 'with Apple as the largest declared customer and Personal Electronics listed as the main driver of growth in Q3 and Q4, St.'s future recovery is tied to a limited number of factors', which means it could prove more complex than the company has indicated.

The last period of last year ended for St. Louis with a net loss of USD 30 million due to non-cash one-time tax charges of USD 163 million, disappointing expectations for positive numbers, and net profit fell 88.5% to USD 180 million in 2025. On the other hand, analysts welcomed the fact that quarterly revenues were above the company's guidance and at the high end of consensus estimates. Citi's analysts say that "St. John's results are improving from a cyclical perspective, but are not yet at capacity. As Intermonte points out, 'guidance for Q1 2026 was slightly better than expected and seasonally adjusted. with a slightly higher gross margin'. For the January-March period, the company expects net revenues of $3.04 billion, down 8.7% from the previous quarter, but 'better than average seasonality in the past and signalling an acceleration of the year-on-year growth momentum that began in the fourth quarter'. The consensus expects first-quarter revenues of EUR2.917bn, while Intermonte analysts are talking about EUR2.98bn (in Q1 2025 they stood at EUR2.517bn), after they fell 11.1% to EUR11.8bn in full-year 2025. In the current quarter gross margin is expected to be around 33.7%, after 35.2% in Q4 and 33.4% in Q1 2025.

Also for Equita, 'fourth quarter results and guidance are slightly better than expected, confirming the ongoing recovery in revenues and profitability', moreover 'in a manner consistent with management's recent messages'. St's strategic priorities, therefore, 'remain: accelerating innovation, implementing the company's programme to redesign the production structure and downsize the global cost base, and strengthening free cash flow generation', said the CEO, Jean-Marc Chery, commenting on the results.

St did not give any forecasts for the full year 2026, but Intermonte believes 'gross margin estimates may increase by around 1% in the wake of the slight improvement in the first quarter', noting that there was no comment on book-to-bill and order intake, as has been the case over the past two quarters. It remains to be seen, going forward, what the trajectory of the company will be, which has in any case anticipated investing between 2 and 2.2 billion in capital, again a signal appreciated by the market, given that last year's estimate for over 2 billion in investments was later revised downwards and the year ended at 1.79 billion.