As “considerable market speculation” continues to buzz around a prospective bid for NXP Semiconductors NV (NASDAQ:NXPI) by QUALCOM, Inc. (NASDAQ:QCOM), Canaccord analyst Matt Ramsay chimes in on the potential over $40 billion deal that would assume an acquisition of $120 per share.
Ahead of the possible merger, the analyst remains bullish, finding the rationale for the deal “compelling” and noting that QCOM could stand to benefit from “considerable offshore cash to diversity its business by acquiring NXP.” As such, despite observing mixed near-term trends, Ramsay reiterates a Buy rating on shares of NXPI with a $120 price target, which represents just under a 17% increase from where the stock is currently trading.
Ramsay asserts, “While neither company has released statements confirming even talks regarding a merger and we believe this outcome is far from certain, we believe the deal does make financial and strategic sense.”
“While our prior valuation metrics and top pick status for NXP’s standalone business already included the possibility of further semiconductor M&A, we continue to believe NXP standalone is fundamentally well positioned and we anticipate sustainable growth at least 50% above the sector over the next several years with integrated security providing multi-sector differentiation and synergies from the Freescale merger providing additional operating leverage,” Ramsay concludes.
According to TipRanks, which measures analysts’ and bloggers’ success rate based on how their calls perform, five-star analyst Matt Ramsay is ranked #115 out of 4,182 analysts. Ramsay has a 65% success rate and realizes 13.2% in his annual returns. When recommending NXPI, Ramsay yields 8.6% in average profits on the stock.
TipRanks analytics exhibit NXPI as a Strong Buy. Based on 13 analysts polled in the last 3 months, 12 rate a Buy on NXPI, while 1 maintains a Hold. The 12-month price target stands at $110.73, marking a nearly 8% upside from where the shares last closed.