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NXP Semiconductors (NXPI) Received its Third Buy in a Row


After Cowen & Co. and Deutsche Bank gave NXP Semiconductors (NASDAQ: NXPI) a Buy rating last month, the company received another Buy, this time from Needham. Analyst Rajvindra Gill maintained a Buy rating on NXP Semiconductors today and set a price target of $120. The company’s shares opened today at $90, close to its 52-week low of $84.59.

Gill wrote:

“We maintain our Strong Buy, $120 PT and would be buyers at these levels following NXPI’s first 2.5 years. Seventy percent of sales is derived from automotive (49%) and industrial & IoT (21%), each growing at 3-yr LT CAGR of 7-10% & 8-11% respectively. Gross margin is expected to be 53 – 57%, operating margin is expected to be 31 – 34%, and FCF of $7-$8B from 2019-2021. Moreover, as of the close of the market 9/10/18, NXPI has repurchased 39.9MM shares, for a total $3.8BN. We expect that the $5BN buyback will be complete before the end of 2018. Stock now trades at ~20% discount to its peers on CY19 P/E.”

According to TipRanks.com, Gill is a 5-star analyst with an average return of 18.6% and a 61.2% success rate. Gill covers the Consumer Goods sector, focusing on stocks such as Smart Global Holdings Inc, Everspin Technologies Inc, and Adesto Technologies Corp.

NXP Semiconductors has an analyst consensus of Moderate Buy, with a price target consensus of $110.08, a 22.3% upside from current levels. In a report issued on September 7, Cowen & Co. also initiated coverage with a Buy rating on the stock with a $111 price target.

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Based on NXP Semiconductors’ latest earnings release for the quarter ending June 30, the company reported a quarterly revenue of $2.29 billion and net profit of $54 million. In comparison, last year the company earned revenue of $2.2 billion and had a net profit of $49 million.

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NXP Semiconductors NV is a holding company, which engages in the development, manufacture, and provision of mixed-signal semiconductor solutions. It operates through the following segments: High Performance Mixed Signal, Standard Products, and Corporate and Other.

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