NXP Semiconductors stock price target raised to $250 from $225 at Needham

Investing.com - Needham has raised its price target on NXP Semiconductors NV (NASDAQ:NXPI) to $250.00 from $225.00 while maintaining a Buy rating on the stock. The semiconductor company, currently trading at $226.30 with a market capitalization of $57.17 billion, appears slightly undervalued according to InvestingPro’s Fair Value analysis.

The price target increase follows NXP’s quarterly results that exceeded expectations, with the company also raising its guidance as the cyclical recovery in semiconductors continues to gain momentum. With a healthy gross margin of 56.2% and a strong current ratio of 2.08, InvestingPro data reveals the company’s solid financial position. Get access to 6 more exclusive ProTips and comprehensive analysis through InvestingPro’s detailed research reports.

Needham highlighted four key indicators that have increased management’s confidence in the company’s cyclical recovery since the previous quarter, including improvements in the Automotive and Industrial & IoT segments, which are expected to grow mid-single digits and high-single digits in the third quarter, respectively.

The semiconductor company is guiding for 8% sequential growth in the third quarter and expects normal seasonality in the fourth quarter with flat to low-single-digit percentage growth quarter-over-quarter.

NXP management also confirmed that impacts from tariffs were immaterial to its business, while Needham’s new price target is based on approximately 16 times the firm’s raised calendar year 2027 earnings per share estimate of $15.75.

In other recent news, NXP Semiconductors reported its second-quarter revenue of $2.93 billion, marking a 3.2% sequential increase and slightly surpassing Stifel’s estimate by 0.9%. The company’s non-GAAP earnings per share reached $2.72, exceeding Stifel’s and Street estimates by $0.06 and $0.04, respectively. UBS has reiterated its Buy rating on NXP Semiconductors with a price target of $276, acknowledging a strong outlook despite expectations of stronger guidance. Similarly, Goldman Sachs initiated coverage on the company with a Buy rating and a price target of $276, highlighting NXP’s significant revenue from the automotive market. Cantor Fitzgerald also maintained an Overweight rating with a $250 price target, despite potential challenges in the automotive sector. Stifel reiterated a Hold rating with a $210 price target following the company’s quarterly results. UBS further raised its price target to $276 from $250, maintaining a positive stance on the stock. These developments reflect a general positive sentiment among analysts regarding NXP Semiconductors’ financial performance and market position.

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