Infineon stock is one of the losers in the morning trading with a decline of around 3 percent in the DAX. The stock is trading at just under 34 euros and has lost almost 10 percent since the beginning of the year after a strong end-of-year rally in November and December (as of February 6, 2024, around 10 a.m.).

The reason for the recent drop in stock price is the rather disappointing first quarter results for the 2023/2024 fiscal year. Investors were particularly unhappy with the lowered forecast for the full year (as of the end of September 2024). Things are not going well for the chip giant at the moment.

Mixed Q1 numbers for Infineon In the first quarter of the 2023/2024 fiscal year (October to December 2023), Infineon generated approximately 6 percent less revenue at 3.72 billion euros compared to the same period last year. At the same time, the segment result (operating profit) decreased by 25 percent to 831 million euros. As a result, the margin also fell, from 28 percent in Q1 of 2022/2023 to 22.4 percent now.

The revenue was expected to be slightly higher, while the margin met expectations. Following the Q1 results, Infineon has also lowered its forecast for the full year. The previous forecast was for revenue between 16.5 and 17.5 billion euros. This forecast has now been lowered to 16 billion euros.

Previously, Infineon had forecast a margin of 24 percent in November, but now the expected segment result margin is in the „low to mid 20 percent range.“ Investments are expected to be around 2.9 billion euros instead of the previously targeted 3.3 billion euros. One reason for the weaker outlook is that Infineon expects unfavorable exchange rates.

Infineon stock: Analysts remain unimpressed After the lowered annual forecast, Infineon stock was one of the losers in the DAX. The outlook for the current fiscal year 2023/2024 is not very promising and the stock has also not performed well over the past year. However, analysts remain unimpressed after the presentation of the quarterly figures and have each confirmed their price targets.

JPMorgan has maintained its „hold“ rating and price target of 38.50 euros. UBS (target price 45 euros) and Jefferies (target price 50 euros) continue to look positively at the DAX stock. This would mean potential gains of almost 50 percent. Currently, things do not look very promising, but investors should not underestimate both Infineon stock and the entire chip industry.

Source: https://aktienscreener.com/