AMS OSRAM: A profitable acquisition at +28%!

A pleasing performance in four weeks from a low level. But can this short-term rise in the shares of the sensor and semiconductor group be confirmed? Can the strong figures and a confident outlook from Broadcom, the US chip manufacturer, perhaps also brighten the mood in the sector in Europe? After all, CEO Kamper and CFO Irle have managed to win over investors with open communication in an incredibly short space of time. The two are not lacking in passion and commitment. However, the near future in particular is likely to be "tough as nails": The decline in the car business "doesn't lick a goat away" in slang-speak, and the mobile business is also likely to get off to a rather poor start seasonally in 1H25. Nevertheless, two "drivers" for the company and the share can be identified: When the economy takes a turn for the better, and when an effective solution is found for the factory in Malaysia. So far, the sale-and-leaseback deal for the factory in Kulim has been a success, but AMS OSRAM has admitted that the plant in question is basically no longer needed. After all, "painful" write-downs of EUR 700 million have already been made; at the beginning of 2024, this item was still recognized at EUR 1.3 billion; the current valuation is "only" EUR 441 million in the books. If the free cash flow actually turns positive in 2025, as CFO Irle confirmed, further or the remaining write-downs are likely to follow. The direction is right, but the shoe is still on the other foot when it comes to the debt burden, although the capital procurement in 2023 should provide some peace of mind until at least the beginning of 2029.

If the individual pieces of the puzzle can be put together over time to form a good whole, there is a high probability of significantly higher share prices in the medium term. CEO Kamper is confident: "We still have a lot of potential, which we will steadily leverage, there is still a lot possible!" Target price: CHF 20!