5. NXP Semiconductors N.V. (NASDAQ:NXPI)
Forward P/E as of March 3: ~17.9x
Number of Hedge Fund Holders: 44
NXP Semiconductors N.V. (NASDAQ:NXPI) provides various semiconductor products. Mizuho upped the company’s price target to $255 from $240, keeping an “Outperform” rating. The model has been updated post the earnings report and the firm continues to see NXP Semiconductors N.V. (NASDAQ:NXPI) as a leading automotive semiconductor supplier. As per the analyst, the company remains well-placed for a H2 2025 recovery in auto and industrials. The company managed to deliver resilient results throughout 2024, implying healthy execution, consistent gross margin, and strong FCF generation despite the challenging market environment.
Elsewhere, Citi analyst Christopher Danely upgraded the company’s stock to “Buy” from “Neutral,” providing a price objective of $290, up from $210. As per the analyst, the analog recovery is imminent. While there remains a downside from the automotive end market, the industrial end market is projected to recover, which is expected to partially offset it. For Q1 2025, on a GAAP basis, NXP Semiconductors N.V. (NASDAQ:NXPI) expects total revenue in the range of $2,725 million – $2,925 million. With the increase in demand for analog semiconductors, the company can witness higher sales volumes throughout its product portfolio. This increase in demand can result in higher capacity utilization in NXP Semiconductors N.V. (NASDAQ:NXPI)’s manufacturing facilities, fueling the margin expansion.
Sound Shore Management, an investment management firm, has released its investor letter for Q3 2024. Here is what the fund said:
“Meanwhile, detractors of note for the quarter were connected by a common theme: signs of a slowing economy. NXP Semiconductors N.V. (NASDAQ:NXPI), a leading chip maker for the auto industry, was lower on uncertain auto demand and package hauler FedEx lagged on muted volume trends. Importantly, both of these companies have ways to increase earnings outside of the business cycle, but are not entirely immune to the recent slowdown. Business cyclicality requires investor patience and a long-term perspective – we have both.”
