Melexis FIRST LOOK: Remaining in an uneven recovery
Melexis saw in 4Q25 still a challenging and unstable environment as the automotive industry demand continues to be cautious and choppy between quarters. They indicated they remain in an uneven recovery. Melexis highlighted that -looking at FY26- 1Q is traditionally impacted by annual customer pricing agreements and seasonal factors such as Chinese New Year and sales patterns outside of automotive. In addition, this year demand is affected by recent changes in EV automotive regulations and purchase incentive schemes.We lower our TP from € 74 to € 72 but maintain our Accumulate rating as we take into account that actions taken during FY25 will start delivering benefits in FY26 with a higher gross margin already in 1Q26 (KBCSe 39.9%, CSS 39.7%) despite a -for us disappointing- outlook of ‘only' stable 1Q26 y/y sales, as they have to navigate the recovery phase of the current demand cycle.
Melexis designs, develops, tests and markets advanced integrated circuits primarily for the automotive industry. Co. sells its products to a wide customer base in the automotive, medical and industrial markets in Europe, Asia and North America. Co.'s main products are Hall effect ICs, Pressure and Acceleration Sensors, Sensor Interface ICs, Automotive Systems-on-a-Chip, Embedded Microcontrollers, Bus System Chips, Optical and Infrared sensors. In each case the products are primarily developed for automotive applications and designated lead customers with subsequent use in commercial and industrial applications.
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