Goldman Sachs Infineon (IFXGn.DE): Key Takeaways from HQ Visit and CEO Meeting
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Following a headquarters visit and meeting with leadership, Goldman Sachs reiterates a Buy rating on Infineon (IFXGn.DE) with a target price of 45 euros. The firm highlights a positive long-term outlook for the automotive segment, particularly in power semiconductors and silicon carbide technologies, though short-term inventory adjustments persist across the supply chain.
Management indicated that SiC products have secured orders from multiple OEMs, with 2025 revenue expected to exceed 500 million euros. The company anticipates that SiC penetration rates will rise from 5 percent in 2024 to over 20 percent by 2030, driven by accelerating vehicle electrification in China and Europe. Infineon maintains a competitive edge through its trench technology despite competitors gaining ground.
The industrial segment, including PLCs and motor drives, is experiencing inventory corrections expected to conclude in the first half of 2025, paving the way for demand recovery later in the year. Inventory days peaked at 130 days in the fourth quarter of 2024 but should normalize to approximately 100 days by mid-2025.
Capital expenditure is projected to decline below 15 percent of revenue in 2025, improving free cash flow generation. Management expressed cautious optimism for single-digit revenue growth, while the broader thesis hinges on meaningful earnings improvement by 2026.