Oppenheimer top analyst Rick Schafer remains on the sidelines despite a “positive” fourth-quarter print released NXP Semiconductors NV (NASDAQ:NXPI) reported yesterday. With his eyes watchful on the forthcoming take-over by QUALCOMM, Inc. (NASDAQ:QCOM), the analyst reiterates a Perform rating on shares of NXPI without listing a price target.

For the fourth quarter, the chip giant brought in $2.44 billion in sales coupled with EPS of $1.76, which aligns with consensus expectations of $2.44 billion, but trounces EPS of $1.65. Additionally, gross margin rose to 51.1% and operating margin hit 29.3%. However, HPMS revenue dipped 2% quarter-over-quarter to $2.06 billion. Free cash flow (FCF) of $606M fell from $620M last quarter. In 2017, the analyst calls for NXP to generate over $2.2 billion in FCF. Meanwhile, net-debt fell from $7.81 billion last quarter to $7.29 billion in the fourth quarter. The analyst tweaks his EPS model from $6.15 to $6.18 in 2017 and from $7.05 to $7.06 in 2018.

Schafer opines, “We see further expansion as management continues to deliver on FSL synergies beyond the promised $500M run-rate. Core Auto grew 17% Y/Y. SCD and SII were up 10% and 29% Y/Y, respectively. However, SIS continued to lag and declined 25% Y/Y. Due to the pending acquisition by QCOM, NXPI declined to guide F1Q. Based on positive peer commentary, we expect Auto/Industrial momentum to continue into the 1Q. Reiterate Perform as fundamentals take a backseat to the pending take-out.”

Overall, “Despite QCOM’s recent legal issues, we believe the acquisition remains on track to close by the end of 2017 following regulatory approval. NXPI shareholder approval came 1/27. Management expects to achieve a $500M synergy run rate within two years of close. We view the deal as strategic/complementary and 25%- plus accretive to QCOM’s CY18 EPS, but recognize above average integration risk,” Schafer contends, anticipating the giant’s shares will begin to approach the $110 acquisition price as the company nears the close of the merger with QCOM by the second half of the year.

As usual, we like to include the analyst’s track record when reporting on new analyst notes to give a perspective on the effect it has on stock performance. According to TipRanks, top five-star analyst Rick Schafer is ranked #25 out of 4,373 analysts. Schafer upholds a 73% success rate and garners 16.9% in his annual returns. When recommending NXPI, Schafer yields 4.9% in average profits on the stock.

TipRanks analytics show NXPI as a Buy. Based on 3 analysts polled by TipRanks in the last 3 months, 1 rates a Buy on NXPI stock while 2 maintain a Hold. The 12-month average price target stands at $112.50, marking a nearly 14% upside from where the shares last closed.