NXP Semiconductors Sees No Big Ramp In End Demand, Yet Analysts Raise Price Targets

Shares of NXP Semiconductors NV NXPI tanked in early trading on Wednesday, despite the company reporting upbeat second-quarter results.

Here are some key analyst takeaways.

• Truist Securities analyst William Stein reiterated a Buy rating, while raising the price target from $230 to $252.
• Needham analyst Quinn Bolton reaffirmed a Buy rating, while taking the price target higher from $225 to $250.

Check out other analyst stock ratings.

Truist Securities: NXP Semiconductors reported solid results for the second quarter, with sales of $2,926 million beating consensus of $2,902 million, with the beat driven by end markets, Stein said in a note. The company's gross margins and earnings of 56.5% and $2.72 per share also came in higher than the consensus, he added.

Management guided to sales of $3.15 billion at the midpoint, above consensus of $3.078 billion, the analyst stated. "It’s a recovery, but it feels more like the end of an inventory burn than a big ramp in end demand," he further wrote.

Needham: NXP Semiconductors delivered a beat-and-raise quarter, with cyclical recovery continuing to ramp, Bolton said. Management guided to sequential growth of 8% for the third quarter and normal seasonality in the fourth quarter, he added.

The company projected mid-single-digit growth in the Automotive segment and high-single-digit growth in the Industrial & IoT for the third quarter, the analyst stated. "NXPI experienced no material pull-ins or push-outs due to tariffs and direct impact of tariffs remain immaterial," he further wrote.

Price Action: Shares of NXP Semiconductors had declined by 2.64% to $221.99 at the time of publication on Wednesday.

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