GENEVA (dpa-AFX) - Sustained strong demand from automakers and industrial companies has chipmaker STMicroelectronics optimistic about the first quarter and the full year. Group CEO Jean-Marc Chery expects sales of between $16.8 billion and $17.8 billion in 2023, representing an increase of between around four and just over ten percent. The growth target is thus significantly higher than the average forecast of the experts to date. After the significant increase in sales last year, they had expected only a minimal increase. The STMicro share price rose sharply and also boosted other stocks in the sector, such as the shares of German competitor Infineon.

Last year, STMicro's revenue picked up by just over a quarter to $16.1 billion (14.78 billion euros). The Italian-French company's net income was just under four billion dollars, almost double the previous year's figure. Operating profit moved up more than 80 percent to $4.4 billion. Looking at the past year, STMicro thus met analysts' expectations.

A look at the start to the current year was significantly better than expected. In the first quarter, sales of around 4.2 billion dollars are expected, almost a fifth more than a year ago. The margin is expected to improve further. To cope with the expected high demand, Group CEO Chery plans to invest a further four billion this year - among other things in expanding capacities. He is thus continuing to ramp up investments: In 2022, capital expenditures will total around three and a half billion dollars.

Analysts praised the company's outlook and prospects in particular. Citigroup expert Andrew Gardiner considers the stock undervalued with a price-earnings ratio of eleven measured against expected 2023 earnings. He rates the stock as "Buy" with a target price of 58 euros. In his opinion, the share still has around 40 percent upside potential.

Gardiner is one of the most optimistic stock experts with regard to the STMicro share price, but the average target price of just under 50 euros is also well above the current level. After the announcement of the forecast for the current year and the first months on Thursday, the share price rose to a peak of just over 43 euros, its highest level in just over a year. However, the share price was not quite able to maintain this level.

At midday, the share price was up around six percent at 41.93 euros. Shares in the German chip manufacturer Infineon rose by up to five percent, while other stocks such as AMS-Osram and the shares of equipment suppliers Aixtron and ASML also benefited from the STM outlook.