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

Shares of NXP Semiconductors NV (NASDAQ: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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