Soitec SA shares plunged over 13% on Wednesday following a reassessment by Jefferies, which trimmed its recommendation to underperform from hold and established a €85 price target. That level represents a 39.35% discount to the stock’s Tuesday close of €140.15, according to the broker.
Jefferies increased its previous price target from €45 to €85, a move the firm said reflects a wider re-rating among optical-focused names. However, the firm judged that even the new target does not support the stock’s prevailing market price. "The stock has run far ahead of what we see as fair value," Jefferies wrote.
On valuation metrics, Jefferies anchored its target to 19 times forecast fiscal year 2028 EV/EBITDA, which it noted sits in line with the peer group’s fiscal year 2027 multiple. By contrast, Soitec was trading at 33.9 times fiscal year 2027 EV/EBITDA, a premium the broker quantified as 85% above a peer average of 18.3 times. Jefferies cited Bloomberg data showing peer multiples that include Coherent at 32.7 times and Lumentum at 29.3 times.
Underlying demand and inventory signals
Jefferies outlined a bear case focused on two end-market segments it sees as weighing on revenue. For RF-SOI wafers, the broker highlighted customer inventory at foundries such as GlobalFoundries, which Jefferies reported at 2 million units as of March 2026. That figure was unchanged from December 2025 and had declined from 2.5 million units in June 2025 at a run-rate of roughly 150,000 to 200,000 wafers per quarter.
Separately, Jefferies expects global handset shipments to fall 19% in 2026 and a further 14% in 2027, a pattern the firm said will keep foundry purchasing activity muted.
Jefferies models Mobile Communications revenue - which represented 52% of Soitec’s fiscal year 2026 sales - to decline 3.5% in fiscal year 2027 and then rise by only 9% in fiscal year 2028. The broker said those assumptions are materially below consensus expectations for a rebound after the correction.
Photonics-SOI and data centre optics
For Photonics-SOI, which made up about 15% of fiscal year 2026 revenue, Jefferies pushed back on market hopes for a rapid step-up driven by Co-Packaged Optics adoption. The broker noted that Nvidia’s NVL72 Oberon and NVL144 Kyber rack configurations will continue to use copper for in-rack Scale Up connectivity, reserving CPO for the switch layer that links multiple racks in NVL576 and NVL1152 setups.
From that perspective, Jefferies said it does not expect a two-tier mix of copper and CPO in Scale Up architectures to produce a substantial acceleration in the overall volume of optical connectivity inside a data centre. The firm therefore projects Photonics-SOI growth of 30% to 40% through fiscal year 2030, a trajectory it sees as meaningful but not transformative enough to justify current consensus valuation assumptions.
Earnings and revenue forecasts
Jefferies’ specific forecasts include fiscal year 2027 revenue of €630.3 million, representing 6.5% growth year-over-year, and fiscal year 2028 revenue of €734.4 million, equal to 16.5% growth. Those top-line estimates sit 11% below consensus for fiscal year 2028, which Jefferies cited as €824.8 million.
On profitability, the brokerage projected fiscal year 2028 EBITDA of €171.9 million, a figure that is 29% below the consensus EBITDA estimate of €241.4 million.
Competitive pressures
Jefferies also flagged potential competitive risk from GlobalWafers, which the broker said is expanding its SOI production across 200 mm and 300 mm wafers and is constructing a new 300 mm facility in Missouri with backing under the U.S. CHIPS Act. The brokerage noted that the company’s gross margin fell to 16.2% in fiscal 2026 from 32.1% a year earlier, and that it reported an operating loss margin of 22.1%, citing company data.
Taken together, Jefferies’ view combines concerns on stretched valuation, a multi-quarter handset downturn that depresses foundry buying, a more gradual ramp for CPO-driven optical demand inside data centres, and intensifying supply-side competition.
Market reaction was swift: the stock’s decline followed Jefferies’ downgrade and its presentation of a valuation framework and revenue and EBITDA assumptions that diverge materially from consensus.
What this affects
- Semiconductor substrate stocks and optical-related suppliers that rely on similar end markets and multiples.
- Foundry customers and handset supply chains, where lower handset shipments translate to softer wafer demand.
- Data centre optical suppliers, where the pace and architecture of CPO adoption influence revenue assumptions for Photonics-SOI players.