UBS downgraded French semiconductor materials manufacturer Soitec to a sell rating from neutral on Monday. The bank established a price target of €85. This target implies a 38% downside from the June 12 closing price.
Analysts identified a disconnect between the company's valuation and its growth prospects. A significant year-to-date rally pushed the stock to a premium valuation compared to industry peers. UBS believes the market overestimates growth trajectories for downstream foundry customers.
The bank increased its price target for the Photonics-SOI segment to reflect new opportunities. However, analysts warned that photonics growth might not offset potential weakness in the larger RF-SOI business.