Infineon with 25-percent chance
The Infineon stock is in a consolidation phase after the latest price drop. Bonus certificates with caps will still provide high returns even if the consolidation lasts longer.
After the profit takings at US technology stocks, such as Nvidia, in June 2024 weighed on the Infineon stock, causing it to drop from 38 Euro to a range of 34-35 Euro.
Since the manufacturers of analog chips have reportedly reached their floor, experts confirmed their buy recommendations for the Infineon stock despite expectations of moderate quarterly earnings with price targets of up to 50 Euro (Jefferies & Company).
The Investment Idea
For investors looking to take advantage of the undervalued Infineon stock and simultaneously reduce the risk of direct stock investment, a favorable time for investing in attractively priced bonus certificates with caps may have arrived.
Bonus certificates with caps not only offer high return opportunities when the Infineon stock rises, but also when it remains stable or significantly declines. As a countermeasure for the attractive downside opportunities, certificate investors must forgo the unlimited profit potential of stock investments and dividend payments.
Functioning
If the Infineon stock does not touch or fall below the barrier of 25.00 Euro by the certificate valuation date on December 29, 2025, the bonus certificate with cap will be redeemed with the bonus amount of 42.00 Euro.
Key Data
With the BNP Paribas bonus certificate with cap (ISIN: DE000PC67DS4) on the Infineon stock, the bonus levels and cap are at 42.00 Euro. The cap defines the maximum payout amount of the certificate. The barrier, which is active until the valuation date on December 19, 2025, is at 25.00 Euro. Investors could purchase the certificate for 33.60 Euro when the Infineon stock was trading at 35.04 Euro. The certificate is therefore significantly cheaper for investors than the stock at that time.
Chances
Since investors can currently purchase the certificate for 33.60 Euro, it offers a gross profit of 25.00% (or 17.00% per year) until December 2025 if the Infineon stock price never falls below 25.00 Euro or 76.35% (or 6.03% per month) below 25.00 Euro by the valuation date.
Risks
If the Infineon stock price touches or falls below the barrier of 25.00 Euro by the valuation date and the stock price is below the certificate purchase price of 33.60 Euro, the certificate will be redeemed with the fixed stock price at the valuation date. If this price is below 33.60 Euro, investors will incur a loss.
This post does not constitute a recommendation to buy or sell Infineon stocks or investment products based on Infineon stocks. No liability is assumed for the accuracy of the data.
- For consumers interested in stock trading, investing in Infineon's bonus certificates with a cap could potentially provide attractive returns, even during a prolonged consolidation phase of the Infineon stock.
- Share tips suggest that the undervalued Infineon stock and its bonus certificates can be an excellent opportunity for wealth accumulation, especially considering the high returns they offer despite moderate quarterly earnings.
- The Jefferies & Company experts have maintained their buy recommendations for Infineon, recognizing the potential for the stock to reach up to 50 Euro, making it an attractive investment option, even if considered through the lens of bonus certificates.
- Infineon's bonus certificates, like the one offered by BNP Paribas, can provide significant profit opportunities for investors, especially since the certificate price is significantly lower than the stock price, making it a more affordable investment option.
