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On Wednesday, Mizuho (NYSE:MFG) Securities updated its outlook on NXP Semiconductors NV (NASDAQ:NXPI), reducing the company’s price target from $260 to $240, yet reaffirming an Outperform rating. The adjustment comes in light of NXP’s recent financial disclosures, which included an in-line December quarter (DecQ) and a softer than expected guidance for the March quarter (MarQ), indicating a sequential decrease of approximately 9%. According to InvestingPro data, 11 analysts have recently revised their earnings estimates downward, with analyst targets ranging from $200 to $305.
NXP Semiconductors, a notable player in the semiconductor industry with $12.61 billion in trailing twelve-month revenue and an impressive 56.66% gross profit margin, anticipates the first quarter of the year to be the lowest point, with the subsequent June quarter likely to see flat to slightly increased sequential revenue. However, the company has expressed that the visibility into future performance remains "cloudy." InvestingPro analysis shows the stock typically trades with low price volatility, with several additional insights available to subscribers.
The firm’s analysis highlighted several key points regarding NXP’s current position and future expectations. These include an anticipated year-over-year drop in 2025 pricing in the low single-digit percentage range, as opposed to the flat rates seen in 2024. Additionally, the March quarter estimates for the automotive sector are projected to be down by a mid-single-digit percentage quarter-over-quarter, which is less severe than the overall Light Vehicle Production (LVP) expected decline of 13% over the same period.
Moreover, the report suggests that inventory digestion may be nearing completion, with channel inventory levels stabilizing around 8 to 9 weeks. This stabilization is seen as a positive sign, as it could indicate that supply chain issues are being resolved. Despite the current low internal utilization rates, which are in the low 70% range, and the consolidation of 200mm fabrication plants, Mizuho maintains its Outperform rating on the stock. InvestingPro data reveals strong financial health with a current ratio of 2.36, indicating solid liquidity. Subscribers can access the comprehensive Pro Research Report for deeper insights into NXP’s operational efficiency and market position.
The analysis also notes that while European markets continue to show weakness, strength in Asia is expected to bolster the industrials segment. Mizuho’s revised price target reflects these updated estimates and the belief that NXP Semiconductors is well-positioned for a recovery in the second half of the year, supported by ongoing trends in the automotive and industrial sectors. Based on InvestingPro’s Fair Value analysis, the stock appears slightly undervalued at current levels, suggesting potential upside for investors who act now.
In other recent news, NXP Semiconductors NV has been a topic of discussion among several analyst firms following its fourth-quarter results and first-quarter guidance. Truist Securities lowered its price target for the company to $245, citing a delay in the anticipated recovery timeline. The firm also adjusted its long-term earnings projections for NXP, expecting an earnings per share (EPS) of $14.83 in 2026.
Meanwhile, Needham revised its price target for NXP Semiconductors to $230, noting challenges in the Automotive sector and the acceleration of the end-of-life process for Freescale’s networking products. The firm lowered its EPS estimate for 2026 to $13.10.
Stifel maintained a Hold rating on NXP with a steady price target of $231, highlighting a 4.3% decrease in revenue for the December quarter and a significant decline in non-GAAP quarterly free cash flow. The firm is awaiting further details from the company’s upcoming earnings call.
Cantor Fitzgerald reiterated an Overweight rating on NXP with a price target of $250, emphasizing the company’s better-than-expected performance in the automotive sector and strong gross margin guidance.
Lastly, Bernstein maintained a Market Perform rating on NXP with a price target of $225, pointing out that the company’s fourth-quarter results closely matched consensus estimates, but its first-quarter guidance fell short of projections.
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