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NXP Semiconductors N.V. (NXPI), with a market cap of $65.1 billion, is a leading semiconductor company that offers high-performance mixed signal and standard product solutions. The Netherlands-based company’s products are applied across various industries, including automotive, wireless infrastructure, lighting, industrial, mobile, consumer, and computing.
Shares of the chipmaker have slightly outperformed the broader market over the past 52 weeks. NXPI has gained 29.3% over this time frame, while the broader S&P 500 Index ($SPX) has rallied 26.1%. However, in 2024, shares of NXPI are up almost 10.8%, lagging behind SPX's 16.5% gain on a YTD basis.
Zooming in further, NXPI outpaces the S&P Semiconductor SPDR's (XSD) 13.7% returns over the past 52 weeks.
On Aug. 15, NXPI closed up over 4%, driven by signs of a strengthening U.S. economy. This surge followed the largest increase in July retail sales in 1.5 years and a drop in weekly initial unemployment claims to a 5-week low. These robust reports eased recession fears and brightened the outlook for a soft economic landing. Chip stocks moved higher and provided support to the overall market.
Moreover, NXPI popped 5.4% on Jul. 22 following the release of its Q2 earnings report. Its revenue fell 5% year over year to $3.1 billion and it reported a slight drop in non-GAAP operating margin. Despite this, the company remains optimistic about future growth, especially in the automotive sector. NXP announced a joint venture with Vanguard International Semiconductor to build a manufacturing facility in Singapore, signaling a long-term commitment to expanding production capabilities.
For the current fiscal year, ending in December, analysts expect NXPI's EPS to decline 5.8% year over year to $11.97. The company’s earnings surprise history is mixed. It beat the consensus estimates in three of the last four quarters, missing on another occasion.
Among the 25 analysts covering the stock, the consensus rating is a “Moderate Buy.” That’s based on 14 “Strong Buy” ratings, two “Moderate Buys,” eight “Holds,” and one “Strong Sell.”
This configuration is slightly more bullish than three months ago, with 13 analysts giving it a “Strong Buy” rating.
On Jul. 24, an analyst at Cantor Fitzgerald reiterated an "Overweight" rating and $350 price target for NXP Semiconductors, expressing confidence in the company’s long-term prospects despite facing near-term industry challenges. The firm noted that the semiconductor sector's recovery is slower than expected, with extended inventory adjustments at major automotive OEMs and continued weakness in the core industrial business. However, Cantor Fitzgerald views these as short-term issues that do not significantly impact NXP’s growth trajectory.
The mean price target of $293.67 represents a premium of 15.4% from NXPI's current levels. The Street-high price target of $370 implies an impressive potential upside of 45.4%.
On the date of publication, Kritika Sarmah did not have (either directly or indirectly) positions in any of the securities mentioned in this article. All information and data in this article is solely for informational purposes. For more information please view the Barchart Disclosure Policy here.
