Oppenheimer analysts weighed in on NXP Semiconductors NV (NASDAQ:NXPI) and First Solar, Inc. (NASDAQ:FSLR) following meetings at the Mobile World Congress convention and Q4:2015 earnings, respectively. Both analysts expressed a bullish tone on the two companies. NXP is leveraging its debt, advancing through its Freescale merger, and taking advantage of new segments and markets. Meanwhile, First Solar posted better than expected key metrics in its earnings release, reporting a strong pipeline and bookings growth, and plans to elaborate on various opportunities in its upcoming analyst day.
NXP Semiconductors NV
Analyst Rick Schafer commented on NXP Semiconductors after management meetings at the Mobile World Congress convention in Barcelona. Overall, the analyst cites a compelling risk/reward ratio for the company due to its merger, recent share repurchases, debt leveraging, and various opportunities. He states that the recent merger with Freescale has over 20% growth potential for EPS and he is optimistic on the synergies it can bring. Related, he believes this merger will result in auto market success for the company, explaining, “We see positive tailwinds for Auto as NXPI capitalizes on FSL cross-selling opportunities and overall semi content growth trends.”
The analyst also believes the company is on track to achieve its target net-debt EBITDA ratio as it recently announced the payment of $200 million on its $500 million bond. He explains, “We continue to believe NXPI has multiple levers to deliver upside/value to investors through FCF returns to shareholders as de-leveraging takes hold.” He also comments on the company’s successful RF packaging relative to its competition, explaining, “Packaging is paramount in RF power and NXPI’s packaging is 3-4 years ahead of the competition.” The analyst notes opportunities in the secure mobile payment segment, as NXPI will supply Samsung’s GS7 with the technology for contactless payments. The company also plans on expanding into the Chinese market with this technology.
Schafer reiterates an Outperform rating on the company without a price target. Rick Shafer is ranked #18 out of 3,720 analysts on TipRanks. He has a 62% success rate recommending stocks with an average return of 15.9% per recommendation.
According to TipRanks’ statistics, 8 analysts rated the company in the past 3 months with a Buy rating. The average 12-month price target for the stock is $106.67, marking a 52% upside from where shares last closed.
First Solar, Inc.
Analyst Colin Rusch weighed in on First Solar after the company released its Q4:15 earnings on February 23. The company posted better than consensus revenues, gross margin, and EPS of $942.3 million, 24.6%, and $1.60, respectively. The analyst credits the earnings win to “impressive product and system cost management and an unusually low tax rate on geographic mix.”
The analyst is particularly bullish on the company’s impressive gross margin growth, explaining, “We remain encouraged to see the company demonstrating module cost improvement via conversion efficiency.” He also cites record bookings and potential bookings, with a “robust” U.S. and international pipeline. The company slightly lowered its revenue and OCF guidance for 2016 to reflect extended timing of projects into 2017, causing the analyst to slightly adjust his own estimates. However, the analyst remains bullish on the stock and expects the company to provide various “technology development, capacity expansion and project pipeline” updates for analyst day on April 5. Investors will also be listening for “further clarity on the opportunity in utility scale markets.”
The analyst reiterates an Outperform rating on shares with a $76 price target. He explains, “We remain constructive on shares given strong demand fundamentals and continued cash generation.” Colin Rusch has a 48% success rate recommending stocks with an average return of 10.4% per recommendation.
According to TipRanks’ statistics, out of the 12 analysts who have rated the company in the past 3 months, 10 gave a Buy rating while 2 remain neutral. The average 12-month price target for the stock is $80.13, marking a 15% upside from where shares last closed.