ZURICH (dpa-AFX) - The major Swiss bank UBS warns against overly high expectations for Aixtron with a view to 2024. Revenue growth is overestimated and the pace of market share gains is likely to slow, analysts led by Madeleine Jenkins said in a study published on Thursday. She rated the shares of the equipment manufacturer for the semiconductor industry as "sell" with a target price of 26.90 euros. The share price came under pressure as a result. Most recently, Aixtron shares in the MDax fell by just over 5 percent to 33.60 euros.

"Despite the recent solid growth and the expected strong final quarter figures, we believe that this development is not sustainable," wrote Jenkins. She expects Aixtron's revenues for the new year to be roughly in line with last year's, compared to an expected 7 percent growth in the market for wafer fabrication equipment (WFE). The analyst average for Aixtron is even higher at 13 percent, explains the expert. In addition, Aixtron will lose pricing power.

One of the main reasons for this is that demand for systems for the production of silicon carbide wafers (SiC wafers) is likely to be lower than the market expects in 2024. This will intensify competition there, which should also affect Aixtron's operating profitability. Their estimate for the earnings margin before interest and taxes in 2024 is therefore 25 percent compared to the consensus forecast of 28 percent.

In view of Aixtron's recent, significant market share gains, the UBS expert expects growth to only 43% in 2024 after an estimated 40% last year. Above all, it is unlikely that Aixtron will gain market share in China, a major driver of the SiC market.

Jenkins cites the time it will take for MicroLED and GaN technologies to reach maturity as the final aspect that is likely to limit sales growth. "Despite the belief in the long-term drivers behind technologies such as GaN and MicroLED, we do not see any significant impact until 2025 and beyond," she stated.

With its "Sell" rating, UBS assumes that the total return of the share (price gain plus dividend) will be at least six percent below the market return expected by UBS over the next twelve months./ck/mis/jha/

Analyzing institute UBS.

Publication of the original study: 03.01.2024 / 16:43 / GMT

First dissemination of the original study: 03.01.2024 / 16:43 / GMT