Stock Market Impact: Jefferies downgraded Soitec SA from "hold" to "underperform" and set a new price target of €85, representing a 39.35% discount to the previous close of €140.15. The downgrade caused the shares to plunge more than 13% on Wednesday.
Valuation Discrepancy: Soitec is currently trading at 33.9 times fiscal year 2027 EV/EBITDA, which is an 85% premium to the peer group average of 18.3x (Coherent 32.7x, Lumentum 29.3x). Jefferies argues the stock has run far ahead of what it sees as fair value.
Revenue & Earnings Forecasts: Jefferies projects FY27 revenue of €630.3 million, a 6.5% increase year‑on‑year, and FY28 revenue of €734.4 million, a 16.5% increase. Both figures are below consensus estimates (FY28 consensus €824.8 million). FY28 EBITDA is forecast at €171.9 million, 29% below the consensus of €241.4 million.
Segment Outlook: Mobile Communications, accounting for 52% of FY26 sales, is expected to decline 3.5% in FY27 and grow only 9% in FY28, well under consensus rebound expectations. Photonics‑SOI, roughly 15% of FY26 revenue, is projected to grow 30‑40% through FY30, with no material acceleration from co‑packaged optics (CPO) adoption in data‑centre scale‑up racks.
Inventory & Demand Pressures: RF‑SOI wafer inventories at customers such as GlobalFoundries stood at 2 million units in March 2026, unchanged since December 2025, after falling from 2.5 million in June 2025 at a rate of 150‑200 k units per quarter. Jefferies forecasts global handset units to fall 19% in 2026 and a further 14% in 2027, keeping foundry buying depressed.
Margin Compression: Gross margin fell sharply to 16.2% in FY26 from 32.1% a year earlier. The company posted an operating loss margin of 22.1% for FY26.
Competitive Threats: Jefferies highlighted a potential competitive threat from GlobalWafers, which is expanding its silicon‑on‑insulator (SOI) production capacity on both 200 mm and 300 mm wafers and is constructing a new 300 mm fab in Missouri, funded under the U.S. CHIPS Act.
Technology Notes: Nvidia’s NVL72 Oberon and NVL144 Kyber racks will continue to use copper for in‑rack Scale‑Up connectivity, with CPO limited to the switch layer connecting multiple racks in NVL576 and NVL1152 configurations. Jefferies does not expect this two‑tier adoption to materially accelerate total optical connectivity in data centres.
