Morgan Stanley downgraded STMicroelectronics' stock rating to 'underweight' from 'equal-weight' on November 4, 2024, expressing concerns about mounting challenges within the automotive sector. The brokerage projects a 6% drop in automotive revenue for STMicroelectronics in fiscal year 2025.
Analysts at Morgan Stanley believe that market expectations for STMicroelectronics, particularly in the automotive segment, are overestimated. They highlighted that weak utilization rates continue to strain margins across the company's automotive segments.
This downgrade reflects a cautious outlook on STMicroelectronics' ability to meet optimistic projections amidst a challenging environment for industrial and automotive chips, which are key markets for the company.
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