NXP Semiconductors Faces Market Challenges Amid Mixed Earnings Reports
Company Overview: NXP Semiconductors N.V. (NXPI), with a market capitalization of $55.2 billion, is a key player in high-performance mixed signal and standard semiconductor solutions. Based in the Netherlands, NXP serves a wide array of sectors, including automotive, wireless infrastructure, lighting, industrial, mobile, consumer, and computing.
Recent Stock Performance: Over the past 52 weeks, the stock has underperformed relative to the broader market. NXPI has risen only 8.1%, while the S&P 500 Index ($SPX) has experienced a gain of 30.4%. In 2024, the stock is down 5.5%, significantly trailing behind the S&P 500’s impressive 23.1% year-to-date gain.
Focusing on semiconductor performance, NXPI also falls behind the S&P Semiconductor SPDR’s (XSD) 14.2% gains over the last 52 weeks and in 2024.
Stock Market Reactions: On November 11, NXP’s shares dropped over 3%, contributing to the overall downturn in chip stocks. The decline followed the company’s Q3 earnings report released on November 4, which led to a further loss of more than 5% in the next trading session. Although its adjusted EPS of $3.45 exceeded market expectations, revenue of $3.25 billion was in line with forecasts. For the upcoming December quarter, NXP projects earnings of $2.93 per share, with revenue expected between $3 billion and $3.2 billion.
Outlook and Analyst Ratings: Analysts predict a 10.5% decline in NXPI’s EPS for the current fiscal year, bringing it down to $11.37. Over the past four quarters, the company’s earnings surprise history has been mixed, beating consensus estimates three times while missing once.
Among 26 analysts covering NXPI, the consensus rating stands at “Moderate Buy.” This includes 16 “Strong Buy” ratings, two “Moderate Buys,” seven “Holds,” and one “Strong Sell.” Compared to three months ago, this outlook has slightly improved, with 15 analysts previously giving a “Strong Buy” rating.
On November 12, Loop Capital began coverage on NXP Semiconductors with a “Buy” recommendation and a $300 price target. The firm acknowledged that NXP, similar to other automotive-focused semiconductor firms, has faced consensus shorts since late 2023 due to inventory downsizing by automotive suppliers. Nevertheless, they believe NXP is strategically positioned to capitalize on the rapidly expanding automotive sector, making it an attractive choice for investors interested in automotive growth.
The average price target of $264.35 suggests a potential upside of 21.8% from current levels, while the highest price target of $315 indicates a remarkable 45.1% potential increase.
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.
The views and opinions expressed herein are those of the author and do not necessarily reflect those of Nasdaq, Inc.
