(Finance) – Fitch Ratings confirmed the Long-Term Issuer Default Rating (IDR) Of STMicroelectronicsan Italian-French semiconductor giant, to “BBB+” with a “stable” outlook.
The ratings remain supported by its diversified product portfolio, with strong positions in the growing automotive and industrial segments and low financial leverage, reads a note from the rating agency. There conservative financial policy of the company mitigates its lower profitability compared to that of competitors, while its net cash position should help it withstand price corrections or cyclical market downturns.
It is also noted that STMicroelectronics continues to demonstrate excellent performance and good cash flow generation capacity, while being able to invest in capex. “We expect the company to see pre-dividend free cash flow (FCF) margins at a mid-teens level starting in 2025, supported by improved profitability and lower capex intensity.
At the same time as confirming the rating and outlook, Fitch announced that it had withdrew ratings by STMicroelectronics for commercial reasons.