Deutsche Bank announced on Tuesday that it had lowered its price target for X-Fab from 12 to ten euros, while renewing its buy recommendation on the semiconductor specialist's stock.

In a research note, the analyst expresses surprise that the foundry has unveiled a three-year, €1 billion investment plan when it expects only 3% business growth this year.

These plans mean that its capital expenditure is set to jump by 63% in 2024, a budget that the intermediary considers an anomaly at a time when automotive and industrial groups are planning to reduce their purchases by 16% this year due to the correction currently affecting inventories.

In its view, changes in financial conditions or demand should eventually curb its ambitions and cause market disappointment, given that the company is targeting 1.5 billion euros in annual sales by 2026.

Even assuming a slowdown in sales or capacity growth, the share price does not include the transformation currently signed by the company.

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