On Wednesday, Stifel analysts adjusted their outlook for NXP Semiconductors NV (NASDAQ:NXPI), reducing the 12-month price target from $231.00 to $210.00. The firm maintained its Hold rating on the stock. According to InvestingPro data, 11 analysts have recently revised their earnings expectations downward, while the stock trades near its 52-week low of $198.21. The analysts cited a lower-than-expected revenue guidance for the current quarter and limited visibility into future performance as key reasons for the adjustment.
NXP Semiconductors’ management has indicated a revenue guidance midpoint of $2.82 billion for the current quarter, which represents a 9.2% sequential decline. This figure is 2.0% below Stifel’s previous estimate and 3.3% below the consensus estimate on the Street. The company’s non-GAAP earnings per share (EPS) guidance of $2.59 was in line with Stifel’s expectations, which were already below the Street’s predictions. The company, currently valued at $53 billion, has seen its revenue decline by 5% over the last twelve months, though it maintains healthy gross margins of 56.7%.
Management’s comments on the earnings call suggested that second-quarter revenues should be modeled as flat to slightly up quarter-over-quarter, which contrasts with the historical seasonal increase of 3.8%. The analysts highlighted that this sub-seasonal guidance reflects the current lack of visibility in the market.
The report further noted that NXP’s key end markets, particularly Automotive and Industrial, continue to show weakness, aligning with Stifel’s industry thesis. The company’s performance is also seen as hindered by a later and shallower correction in its business cycle compared to peers, with a specific mention of Automotive revenues being down 6% from their peak in the fourth quarter of 2023.
Despite non-GAAP gross margins (GMs) being reduced less than anticipated, Stifel analysts believe that there is limited potential for gross margin upside or expansion in the near term, pending a more sustained recovery in demand. The new price target of $210.00 is based on a 16.8 times the firm’s estimated CY26 earnings per share. InvestingPro analysis suggests the stock is currently fairly valued, with a strong current ratio of 2.36 indicating solid liquidity. For deeper insights into NXPI’s valuation and financial health, including exclusive ProTips and comprehensive analysis, check out the full Pro Research Report, available to InvestingPro subscribers.
In other recent news, NXP Semiconductors NV has been the focus of various analyst firms following its recent financial disclosures. Mizuho (NYSE:MFG) Securities lowered the company’s price target from $260 to $240, citing a softer than expected guidance for the March quarter. Despite this, the firm reaffirmed an Outperform rating. Simultaneously, Truist Securities reduced its price target for NXP Semiconductors to $245 from $264, maintaining a Buy rating. Needham analysts also adjusted their price target for the company to $230, while Stifel analysts maintained a Hold rating with a steady price target of $231. Lastly, Cantor Fitzgerald reiterated an Overweight rating on NXP Semiconductors with a steady price target of $250. These adjustments reflect recent developments in the company’s financial performance and future expectations.
This article was generated with the support of AI and reviewed by an editor. For more information see our T&C.