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Investing.com - NXP Semiconductors (NASDAQ:NXPI) may have guided for lower revenue in the current quarter, but the outlook was "getting close to a bottom", according to analysts at Citi.
In a note to clients lifting their rating of the chipmaker to "neutral" from "sell", the analysts noted that consensus analyst estimates have now fallen by roughly 30% and are only 10% above their projections.
"Time to upgrade," the analysts wrote, adding that they believe "most of the downside" risk is "in estimates and the stock".
The comments come after NXP unveiled a first-quarter revenue forecast of $2.73 billion to $2.93 billion, indicating a midpoint that was below analysts’ expectations of $2.89 billion, LSEG data cited by Reuters showed.
NXP, which provides semiconductors and other technology to sectors like automotive, manufacturing, telecommunications and the Internet of Things, has been hit recently by sluggish demand. The impact has been particularly felt in its automotive operations, where tepid car-buying activity due to elevated prices and higher interest rates has contributed to a glut in chip inventories.
Still, strength in NXP’s business in China helped the company deliver fourth-quarter sales of $3.11 billion that were just above forecasts. Adjusted earnings per share of $3.18 also beat expectations.