Beware of possible bearish signals on the STMicroelectronics stock – depositidiborsa.it
With an increase of over 30% since the beginning of the year, the technology sector is depopulating in Piazza Affari. On February 6, however, it experienced its first real setback, losing about 2%. As always happens to drag downwards, or upwards, the FTSE Italia All-Share Technology is STMicroelectronics. Is the wind turning and after an exhilarating start is it time to escape the tech sector? To answer this question, just look at STMicroelectronics which will capitalize on all its competitors tomorrow, at least in Italy. The Italian-French company with its capitalization of around 40 billion euros accounts for over 90%. The other components of this sector are Reply, Sesa, Sabaf, TXT e-solutions, EEMS and others. In particular, EEMS since the beginning of the year has been moving completely against the trend of the sector index as it loses about 20%.
After an exciting start, is it time to escape the tech sector? The indications of the graphic analysis
The title STMicroelectronics (MIL:STM) closed the February 6 session at €45.11, down 2.19% on the previous session.
After the long hike the averages are firmly crossed to the upside. A pfirst sign of weakness could come from one daily closing lower than €44.116. A decisive bearish reversalhowever, could come from one daily closing lower than €40.98.
On the upside, however, the next target could be placed in the €49.2 area. Once this level is exceeded, STMicroelectronics’ quotations could jump up to the €57.4 area.
Note that the quotes are overbought.
Averages crossed upwards on the stock STMicroelectronics – projectiondiborsa.it
Title evaluation
Whichever indicator is used, STMicroelectronics shares appear to be undervalued in terms of market multiples. For example, the price-to-earnings (PE) ratio expresses an underpricing of more than 50%. Even the price-to-turnover ratio shows an underestimation, albeit contained at about 30%. This level of undervaluation is confirmed by the fair value, calculated using the discounted cash flow method, which expresses an undervaluation of 35%.
Analysts covering the stock have an average target price that expresses an undervaluation of approximately 16%. The dispersion between the various recommendations, however, is more than 20%. This means that there is no unanimity of views on the title.
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