NXP Semiconductors Shows Signs Of Bottoming, 5 Analysts Dive Into Q1 Results

Shares of NXP Semiconductors NV NXPI were up Tuesday after the company reported higher-than-expected earnings for its first quarter.

Here are some key analyst takeaways from the release.

• KeyBanc Capital Markets analyst John Vinh cited "solid" NXP results for the first quarter
• Cantor Fitzgerald analyst CJ Muse maintained an Overweight and price target of $290
• Mizuho Securities analyst Vijay Rakesh reaffirmed a Neutral rating and price target of $225
• Stifel analyst Tore Svanberg reiterated a Hold rating on the stock
• Oppenheimer analyst Rick Schafer maintained an Outperform rating on the stock.

Check out other analyst stock ratings.

KeyBanc Capital Markets: Earnings came in at $3.24 per share, Vinh noted. This beat the consensus of $3.16 per share. A gross margin of 58.2% marginally surpassed market expectations of 58%.

The company expects revenue to remain sequentially flat in the second quarter. There are "signs of stabilization and bottoming cyclical demand in industrials," the analyst wrote.

Cantor Fitzgerald: The latest results did not constitute a "blowout quarter," Muse said. Instead, they represented "a perfectly executed report and guide." There were "cyclical fears surrounding the company's Automotive/Industrial business lines," Muse added.

While commentary from other players signaled a deteriorating backdrop from three months ago, NXP Semiconductors presented "a much better-than-feared outlook, particularly given that the company's Auto biz accounts for 55-60% of revenues," the analyst says. The limelight is currently on "gauging the sustainability of demand" and a potential recovery into the back half of the year, he added.

Mizuho Securities: NXP Semiconductors guided to gross margin expansion of 50 basis points (bps) in the second quarter, "pointing to solid execution," Rakesh said in a note.

"We believe 2024E could potentially be flat y/y (vs NXPI consensus top line down 1% y/y) with NXPI cautiously optimistic on 2H24," he added.

Stifel: All end-markets performed as expected and channel inventories remained low, Svanberg said. Management guided to a revenue range with $3.125 billion at the midpoint, he added.

"With Automotive data points still mixed, we view a more concrete 2H Auto recovery remains too early to call," the analyst further wrote.

Oppenheimer: "We see industrial growing in 2H but believe auto (58% of sales) likely a drag for most of 2024 as that vertical cyclically corrects," Schafer wrote in a note. "NXPI proactively keeping channel inventory lean, now 1.6 months vs. historical 2.5 (delta represents $500M)," he added.

Direct customer inventory is expected to be cleared in the second quarter, which sets the stage for a better performance in the back half of the year, the analyst said.

NXPI Price Action: Shares of NXP Semiconductors had risen by 3.92% to $256.82 at the time of publication on Tuesday.

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