Besi Earnings: Further Share Price Declines Can Offer a Good Opportunity to Buy a High-Quality Stock

Narrow-moat t BE Semiconductor Industries shares declined more than 20% since the beginning of this week as a perfect storm scenario hit the shares. First, on July 24 peer ASMPT gave a disappointing outlook for the third quarter and said it expects a 6.4% sequential sales decline. ASMPT shares took a 23% hit, dragging Besi shares down by almost 8%. Moreover, Google’s parent Alphabet hinted there might be overinvestment in artificial intelligence, causing a major pullback in semiconductor stocks. Although we are reducing our 2024 revenue estimate for Besi by 15% due to weaker demand in mainstream applications like autos and industrial, we anticipate a stronger recovery over 2025-27 and maintain our EUR 120 fair value estimate. Our forecasts, although bullish, also remain more conservative than PitchBook consensus prior to this earnings release. Shares are now fairly valued and further declines may offer a good buying opportunity.