To all: Robertson, Stephens assessment of STM...
Tuesday September 16 11:34 AM EDT
Company Press Release
Robertson Stephens Initiates Coverage of SGS-Thomson Microelectronics
SAN FRANCISCO, Sept. 16 /PRNewswire/ -- Robertson, Stephens & Company research analyst Elias Moosa initiated coverage today on SGS-Thomson Microelectronics (NYSE:STM) with a Long Term Attractive rating. SGS-Thomson is a global semiconductor company catering to diverse end-market applications and customers. With $4.1 billion in revenues in 1996, SGS-Thomson accounted for about 3% of the worldwide semiconductor market, maintaining leadership positions in the analog and non-volatile memory markets.
``It appears that SGS-Thomson has firmly emerged from the difficult period of industry-wide inventory correction,'' said Moosa. ``While much of the benefit from expectations for sequential revenue growth over the coming two quarters has already been factored into the company's valuation, the re- acceleration in revenues could deliver leverage to the gross margin and could prove to be a future catalyst for the stock,'' Moosa believes.
Moosa's investment thesis is based on three key factors:
1) The breadth and depth of the SGS-Thomson's product portfolio positions the company to serve both customers with specialized needs and customers that require ``system solutions,'' and thereby grow at rates equal to or better than the overall semiconductor market on a long-term basis.
2) The company has successfully adopted a high volume strategy; its manufacturing capability has positioned it to dominate both differentiated and commodity high-volume markets.
3) SGS-Thomson's diversified customer base, especially its strategic alliance partners, spans multiple geographical areas and end-market applications, and comprises a relatively balanced revenue base.
Moosa's F97 EPS estimate is $3.00 on revenues of $4,045 million. His F98 EPS estimate is $4.60 on revenues of $4,935 million. ``Given the company's track record and positioning in the semiconductor industry, we view SGS-Thomson stock as a core holding for investors with long-term investment horizons,'' Moosa said.
Robertson, Stephens & Company is a leading international investment banking firm focused on emerging growth companies. The firm's 44 senior research analysts cover over 500 companies.
The information contained herein is not a complete analysis of every material fact respecting any company, industry or security. Although opinions and estimates expressed herein reflect the current judgment of the Firm, the information upon which such opinions and estimates are based is not necessarily updated on a regular basis; when they are, the date of the change in estimate will be noted. In addition, opinions and estimates are subject to change without notice. This Report contains forward-looking statements which involve risks and uncertainties. The Company's actual results may differ significantly from the results described in the forward-looking statements. Factors that might cause such a difference include, but are not limited to, those discussed in ``Investment Risks.'' Robertson, Stephens & Company LLC, from time to time performs corporate finance services for some companies described herein and may occasionally possess material, nonpublic information regarding such companies. This information is not used in the preparation of the opinions and estimates herein. Facts and other information discussed have been obtained from sources considered reliable but are not guaranteed. Robertson, Stephens & Company LLC, its managing directors, its affiliates, and/or its employees may have an interest in the securities of the issue(s) described and may make purchases or sales while this report is in circulation. Robertson, Stephens & Company LLC is regulated by the Securities and Futures Authority in the United Kingdom. This publication is not meant for private customers.
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