Morgan Stanley: Soitec
Financial Performance & Estimates> F1Q27 Beat: Revenue came in at €113 million, beating street estimates by 6% and marking a 23% year-over-year growth ( outpacing the company's 15% guide). > Strong Guidance: F2Q27 revenue growth is guided at more than 30% year-over-year, blowing past the 4% consensus expectations. > Significant Earnings Upgrades: Morgan Stanley raised its revenue estimates for FY27–FY29 by 8–19% and upgraded EPS for FY28 and FY29 by 43% and 32% respectively, projecting almost €8 of EPS by FY29. 💡 Core Investment Drivers (Photonics-SOI)> The Growth Engine: The stellar performance and guidance are heavily driven by Photonics-SOI demand for high-speed optical interconnects in AI data centers. > Doubling Revenue: Management explicitly noted that Photonics-SOI FY27 revenue is expected to more than double, acting as the catalyst the market had been anticipating. > Secular Alignment: Soitec’s stellar outlook mirrors broader industry tailwinds from major players scaling up silicon photonics (SiPho) capacity—such as Tower Semiconductor, STMicroelectronics, and TSMC. Photonics is expected to scale from roughly 8% of Soitec's revenue in FY25 to about one-third in the current fiscal year. Scenario Analysis (Price Target Cases)> Bull Case (€300.00): Assumes a stronger recovery in RF-SOI alongside more aggressive, accelerated growth in Photonics-SOI, paving the way for €10 in earnings power.> Base Case (€200.00): Assumes multi-year growth in Photonics-SOI and normalization in RF-SOI, applying a 25x multiple to CY28 (FY29) EPS.> Bear Case (€80.00): Assumes a slower RF-SOI recovery and weaker Photonics growth, applying a 20x multiple to discounted bear-case earnings.
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