Euronext Brussels: Melexis out of control due to scarcity and Texas
Despite better results and a higher profit forecast, Melexis is not getting performance. Azelis gets three buy recommendations in one fell swoop, Shurgard receives one.
The optimism about a good season, which caused the EuroStoxx50 to bounce 0.9 percent on Tuesday, has largely disappeared on Wednesday. Operating results were more mixed and the prices of various commodities fell. In addition, Germany, Europe’s main economic engine, is lowering its growth forecast for this year. After a flat start, the EuroStoxx50 is down 0.2 percent around 12:40 p.m.
the loss can be up to 0.1 percent at 4,216 points. Thanks to defensive values like the network manager Elia
(+0.8%), the real estate player Aedifica
(+1%) and pharmaceutical company UCB
(+0.7%) doesn’t let the weaker than results of its peer Heineken put it off. The Dutch brewer suffered severe lockdowns in the Asia/Pacific region in the third quarter. AB InBev opens its books on Thursday at 7 a.m.
The pressure on the Bel20 comes from, among other things, Melexis
. However, the developer and marketer of semiconductors and sensors – especially for the automotive industry – came out with strong quarterly figures and raised its profit forecast. Melexis profited from strong demand for chips and saw operating profit increase 153 percent year-on-year. The Ypres company raises its forecast for the operating profit margin from 22 to 23 percent. For 2022, CEO Marc Biron is a bit wary because of the shortage of components. Melexis distributes its products to its customers as best it can and could deliver more, but the question is that will happen.
Melexis’ third quarter results were better than expected, says Ruben Devos, analyst at KBC Securities. He maintains his buy recommendation and price target of 105 euros.
The results of the second half have been impacted by the disruptions in the supply chain and lower production expectations from car manufacturers, notes Devos. Several other suppliers came to the production units.
Nevertheless, Devos thinks that the current semiconductor scarcity offers opportunities for Melexis because that term may prompt them to close term and reconsider their relationship with chip sellers. Melexis’ fundamentals will remain intact in the long term and have even been supported by electrification of the vehicle fleet during the course of this year.
Also no changes in the advice of price target at ING (hold, 100 euros). In the current circumstances – a tight supply and customer service according to availability – Melexis is making the most of it, concludes analyst Marc Hesselink. Thanks to a better mix, the profit margin and operating profit are 9 percent higher than expected.
Melexis will need to find output production capacity to meet consensus expectations in 2022.
He also points out that Melexis believes the market will remain tight in 2022. The consensus expects a 10 percent year-on-year growth to reach a turnover of 703 million euros by 2022. That is well above the current million turnover projection of 650 euros. Melexis will therefore have to find production capacity to meet the consensus expectations.’
Despite the good figures, the Melexis share turns out to be 2 percent to 96.25 euros. Kepler Cheuvreux points to the high valuation and strong performance of the stock data leading up to the quarter. According to the analyst, the American chipmaker Texas Instruments issued a forecast on Tuesday evening that was in line with analysts’ expectations. ‘That is used as a disappointment and can put pressure on the sector.’ Industry peers STMicroelectronics and Infineon are lower.
Three buying recommendations
The four brokers that the chemical distributor Azelis
to the stock exchange together, may publish for the first time. The differences are split between buying and holding, data from Bloomberg. Stijn Demeester of ING and Rajesh Kumar of HSBC give a buy recommendation with a price target of 32 and 31 euros. Exane also puts Azelis on ‘buy’ with a price target of 31 euros. Suhasini Varanasi of Goldman Sachs and James Rose of Barclays stick to ‘keeping’ with a price target of 30 euros each. Azelis wins 1 percent to 28.28 euros.
It goes less well Shurgard
. The operator of self-storage warehouses from 2.2 percent to 52.70 euros. Jefferies analyst Andrew Gill corrected his advice from ‘buy’ to ‘hold’ after the nice rise this month. At the same time, he raises his price target from 54 to 56 euros.
European stocks slowed down after an annual run of business results and the German government slashed its growth forecast for this year. In Brussels, Melexis cannot trade an excellent quarterly report and a higher earnings forecast in price gains.
The busiest day of the third quarter results season is upon us with the ECB’s rent decision. Fasten your seat belts! In Brussels, AB InBev and Solvay steal the show, but Ontex, Argenx, Kinepolis, Telenet, Quest for Growth, Exmar and Befimmo also come up with figures. Not to mention Volkswagen, Airbus, Amazon and Apple.