Melexis Navigating the Impact of Trump's Tariffs and his U-turn
We have updated our model to assess the impact of Trump's tariffs and his U-turn of yesterday. Consequently, we are lowering our Target Price to €70 (previously €76) while maintaining our Buy-rating. Please note that Melexis remains part of the KBC Securities' Dynamic Top Pick List, and we continue to hold a positive outlook.Although Melexis' direct sales to the US account for approximately half of the 9% of FY24 NALA sales, the other half is attributed to clients in Canada and Mexico, with the US being their primary end market. Additionally, Tier 1 clients located in Asia (60% of Melexis' sales) and Europe (31% of sales) also ship their components, which include Melexis chips, partly to the US. This market represents 18% of the worldwide total light vehicle volume sales.
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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