Truist lifts NXP Semiconductors stock target to $258

Tuesday, shares of NXP Semiconductors NV (NASDAQ:NXPI), currently trading at $231.28 with a market capitalization of $58.87 billion, may see increased investor interest following an update from Truist Securities. Analysts at the firm have increased the price target on the stock to $258 from $245, while retaining a Buy rating. The adjustment comes as the analysts refine their financial model to better account for the company’s joint venture investments. According to InvestingPro analysis, the stock appears slightly overvalued at current levels.

The revision in the model by Truist Securities reflects a more precise calculation of NXP’s non-consolidated joint venture investments. This change is expected to slightly decrease the company’s free cash flow (FCF) and earnings per share (EPS) in the short term. For the calendar year 2026, the analysts have adjusted the EPS forecast to $14.72, down from the previous estimate of $14.83. InvestingPro data shows that 16 analysts have revised their earnings downwards for the upcoming period, with the company currently maintaining a healthy diluted EPS of $9.73.

The analysts also note that NXP’s investments are projected to impact cash flow and EPS for the calendar year 2027, which extends beyond their two-year explicit modeling horizon. Despite this, there is a positive outlook for the future as the investments are anticipated to transition from a cost to a benefit. Starting in the calendar year 2028 and onwards, these joint venture investments are expected to contribute approximately a 3% increase to both cash flow and EPS.

The basis for the raised price target to $258 is a 17.5x multiple, which represents a 6x discount compared to the recently expanded multiples of NXP’s peers. Truist Securities’ analysts have taken into account these industry dynamics while setting the new price target.

Investors are encouraged to consider the long-term potential benefits of NXP’s joint venture investments as they evaluate the company’s stock performance and future prospects. The updated price target from Truist Securities reflects confidence in the semiconductor company’s investment strategy and its ability to generate shareholder value in the coming years. InvestingPro analysis reveals the company maintains a strong financial health score, with an impressive gross profit margin of 56.66% and liquid assets exceeding short-term obligations. For deeper insights into NXPI’s financial metrics and growth potential, investors can access the comprehensive Pro Research Report, available exclusively to InvestingPro subscribers.

In other recent news, NXP Semiconductors has announced its acquisition of AI firm Kinara for $307 million, a move aimed at strengthening its portfolio in AI processing. The transaction, pending regulatory approvals, is anticipated to be finalized in the first half of 2025. Kinara’s high-performance neural processing units and AI software will be integrated into NXP’s offerings, enhancing their AI platforms to drive intelligent system solutions across industrial and automotive edge markets.

In the realm of analyst actions, Stifel has reduced its 12-month price target for NXP from $231 to $210, maintaining a Hold rating. The firm cites lower-than-expected revenue guidance for the current quarter and limited visibility into future performance as key reasons for the adjustment. Similarly, Mizuho (NYSE:MFG) Securities has cut its price target for NXP from $260 to $240, while affirming an Outperform rating. Truist Securities has also adjusted its price target for NXP, lowering it to $245 from the previous $264, but continues to hold a Buy rating on the stock. Lastly, Needham has revised its price target for NXP to $230, maintaining a Buy rating.

These recent developments reflect the evolving landscape of NXP Semiconductors, as the company continues to navigate the complex dynamics of the semiconductor industry.

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