Investing.com -- JPMorgan started coverage on BE Semiconductor Industries (AS:BESI) with an Overweight rating and a December 2026 price target of €121.
Besi, a major European supplier of semiconductor assembly equipment, is a market leader in hybrid bonding, a cutting-edge packaging technology expected to gain widespread adoption.
Besi’s consumer markets, which include mobile devices, PCs, and automobiles, have experienced a downturn over the past few years. However, JPMorgan’s analysis indicates that Besi is well-positioned for substantial growth once the semiconductor industry sees an overall recovery.
“Besi has already received 100+ hybrid-bonder orders before mass adoption of the technology,” JPMorgan analysts led by Sandeep Deshpande highlighted, with notable clients such as AMD (NASDAQ:AMD), Nvidia (NASDAQ:NVDA), Intel (NASDAQ:INTC), and high-bandwidth memory (HBM) suppliers evaluating the technology for next-generation chips.
“This indicates that, if adoption takes off in ’26-27, as we expect, Besi could see substantial revenue growth,” Deshpande added.
While trading at a valuation premium compared to its peers, with an EV/EBITDA roughly 72% higher and a price-to-earnings (P/E) multiple about 53% higher, JPMorgan justifies this premium by pointing to Besi’s structural growth potential.
This potential is driven by the increasing adoption of hybrid bonding, the company’s superior margin profile, and better free cash flow conversion rates.
“Besi stock re-rated from full-year 2019-20 as the market became aware of its leadership in next-generation IC packaging technology. It has traded at a consistent premium to peers since then. Thus, we believe that the premium is unlikely to subside,” Deshpande said.
The analyst acknowledges the semiconductor downturn’s impact on Besi, with revenue declining approximately 19% from its peak in full-year 2021 (FY21) to FY24. However, the company’s exposure to consumer end markets has been de-risked, Deshpande notes.
While mobile end market revenue and automotive revenue have decreased significantly, Besi’s computing revenue has risen notably, even as PC sales have dropped. This suggests that Besi is benefiting from secular trends in data centers and AI, along with early sales from its hybrid-bonding technology.