Canaccord analyst Matt Ramsay weighed in today with a favorable report on NXP Semiconductors NV (NASDAQ:NXPI), after the company released its second-quarter earnings results, posting revenue of $1.51 billion and non-GAAP EPS of $1.44, inline with Ramsay’s revenue estimate of $1.51B and above his EPS estimate of $1.38. Additionally, the analyst reiterated a Buy rating on the stock, with a price target of $130, which represents a potential upside of 34% from today’s closing price.
Ramsay wrote, “The beat came primarily from lower operating expenses of $316M versus our estimate of $331M as divisional revenue was impressively spot on guidance. Notably, the Secured Connected Devices and Secure Interfaces & Power businesses were up 39% and 29% Y/Y, respectively, while Standard Product sales were solid (+2% Y/Y) despite macro concerns with operating margins expanding 340 basis points Y/Y.”
“NXP guided for Q3/15 revenue and non-GAAP EPS of $1.55B/ $1.50 at the midpoints, below our estimates of $1.62B/$1.56, respectively. However, we believe this is quite impressive given the significant revenue headwind in HPRF sales to China wireless customers (down ~40% Q/Q). Importantly, that business has already been sold for $1.8B in cash to facilitate the Freescale merger.”, the analyst added.
Bottom line, “We continue to believe NXP is fundamentally the best positioned mixed-signal semiconductor firm, regardless of market cap. We anticipate sustainable growth at least 50% above the sector over the next several years with integrated security providing multi-sector differentiation.”
According to TipRanks.com, which measures analysts’ and bloggers’ success rate based on how their calls perform, analyst Matt Ramsay has a total average return of 7.3% and a 47.8% success rate. Ramsay has a 11.4% average return when recommending NXPI, and is ranked #921 out of 3721 analysts.