WAF: Customer Inventory Drawdown Will Drive Wafer Volume Recovery Into 2026

Analysts have nudged their average price target on Siltronic slightly higher, reflecting a modest uptick in long term growth expectations as recent research points to recovering wafer volumes into 2026 and reduced downside risks at current EUR share levels.

Analyst Commentary

Recent Street research reflects a cautiously constructive stance on Siltronic, with multiple target price revisions signaling improving confidence in execution and end market recovery, even as some valuation and cycle timing concerns persist.

Bullish Takeaways

• Bullish analysts highlight that the latest quarterly update likely marked a cyclical low, supporting the view that earnings have limited downside from here.
• Upgraded ratings and higher price targets are being justified by expectations of gradual wafer volume recovery into 2026, which could drive operating leverage and margin improvement.
• Some see the shares trading near historical lows on key valuation metrics, framing the current level as an attractive entry point ahead of a multi year upturn.
• Improving customer wafer inventory dynamics, with stock levels being drawn down, are viewed as reducing the risk of further demand cuts and supporting a more visible growth trajectory.

Bearish Takeaways

• Bearish analysts maintain more cautious ratings, arguing that the pace of volume recovery may be slow, limiting near term earnings momentum despite the longer term improvement story.
• There is concern that, after recent share price strength and target upgrades, upside may be more constrained if execution on cost control and capacity utilization does not accelerate.
• Some point to residual macro and sector risks, including potential delays in customer capital spending, which could push out the timing of the expected 2026 volume rebound.
• Neutral stances are supported by a view that, while downside risk has eased, the risk reward profile remains balanced until clearer evidence of sustained order growth emerges.

What's in the News

• Jefferies lowered its Siltronic price target to EUR 70 from EUR 75 but maintained a Buy rating, stating that Q3 likely marked a bottom, with volumes expected to recover gradually into 2026 (Jefferies).
• Siltronic AG confirmed its 2025 earnings guidance, expecting sales to be in the mid-single-digit percent range below the prior year and EBIT to decline significantly, mainly due to the start of depreciation for its new Singapore fab (company guidance).

Valuation Changes

• Fair Value: Unchanged at €54.61 per share, indicating no revision to the intrinsic value estimate.
• Discount Rate: Steady at 9.98 percent, reflecting an unchanged view of Siltronic's risk profile and cost of capital.
• Revenue Growth: Risen slightly to 7.38 percent (rounded), implying a marginally more optimistic long term top line outlook.
• Net Profit Margin: Fallen slightly from 10.78 percent to 10.76 percent (rounded), suggesting a minor reduction in expected profitability.
• Future P/E: Risen slightly from 11.82x to 11.84x, indicating a modest increase in the valuation multiple applied to forward earnings.