Jefferies Initiates Coverage on SUSS MicroTec with Buy Rating, Citing Growth Potential

Jefferies initiates coverage on SUSS MicroTec with Buy rating By Investing.com

Jefferies has begun coverage of SUSS MicroTec SE (SMHN: GR), a key player in the semiconductor equipment industry, assigning a Buy rating and setting a price target at €76.00. SUSS MicroTec, recognized for its role in the supply chain of NVIDIA (NASDAQ:NVDA) and AI technologies, is highlighted for its significant exposure to the Chip-on-Wafer-on-Substrate (CoWoS) process, which accounts for approximately 30% of its sales. The analyst from Jefferies pointed out that the demand in the High Bandwidth (NASDAQ:BAND) Memory (HBM) segment for Temporary Bonders is expected to be a major growth opportunity for the company. Additionally, the growth in Photomask Cleaning is closely linked to the shipments of Extreme Ultraviolet (EUV) lithography systems from ASML (AS:ASML), one of the leaders in the semiconductor industry. The potential for further expansion through localization efforts was also noted. Jefferies' forecast for SUSS MicroTec's earnings per share (EPS) for fiscal years 2025 and 2026 stands at 12% and 15% above consensus, respectively. The optimistic outlook is based on the belief that the current 18% discount in the company's valuation, compared to its peers, is likely to diminish as the market gains a better understanding of SUSS MicroTec's growth trajectory. SUSS MicroTec's position within this supply chain and its potential for further expansion could make it an attractive prospect for investors seeking exposure to this market segment, noted Jefferies analyst.

Süss Microtec ends weak phase - Jefferies advises to buy

FRANKFURT (dpa-AFX) - A buy recommendation gave new momentum to the shares of Suess Microtec on Tuesday. The shares of the semiconductor supplier soared by 11.6 percent to 59.90 euros around midday and were thus clearly ahead in the SDax. The second-line index gained almost one percent. Analysts Jefferies gave Süss Microtec shares a "buy" rating with a target price of 76 euros. The experts expect the shares to achieve a total return (price gain and dividend) of at least 15 percent over the next twelve months. Süss Microtec is a "hidden diamond", wrote analyst Olivia Honychurch. The company occupies a unique position in Europe in the Nvidia supply chain and the trend topic of artificial intelligence (AI). Honychurch referred to the multi-layered offering in the Chip on Wafer on Substrate (CoWoS) area, which accounts for around thirty percent of the company's sales and is required for the production of AI chips. With this technology, several memory chips can be combined side by side on one carrier, saving costs and space. It also generates less heat than other production processes. The demand for Süss' system and process solutions for microstructuring in the semiconductor industry is currently particularly high among companies that manufacture high-bandwidth memories, the expert continued. This is because in the manufacturing process for these chips, each layer has to be thinned out in order to fit into a CoWoS package. The jump in the share price on Tuesday also significantly brightened the technical picture. Süss Microtec shares have clearly broken through their downward trend since the end of July. In addition, the shares are now trading well above the 50-day moving average, which is regarded as a measure of medium-term development. The bar or candlestick chart also shows that the Süss Microtec shares have finally closed the price gap that was torn at the beginning of August after two attempts. Investors interested in the chart could also see this as a buy signal. Süss Microtec shares have now gained 116 percent year-to-date. They are also by far the best stock in the SDax from this perspective. The latter is down 2.7 percent./la/ag/jha/