Why These NXP Semiconductors Analysts Are Not Disappointed With Q4 Guidance Miss

Shares of NXP Semiconductors NV NXPI jumped in early trading on Tuesday, after the company reported its third-quarter results.

The results came amid an exciting earnings season. Here are some key analyst takeaways from the earnings release.

Check out other analyst stock ratings.

KeyBanc Capital Markets: Analyst John Vinh said the company’s better-than-expected third-quarter earnings reflect “solid demand in core-industrial and mobile, with auto largely in line and comm infra below.”

The fourth-quarter guidance was broadly in-line but with a 1% sequential decline in revenues, “which likely reflects indications of slowing auto/industrials,” he added.

Mizuho Securities: Analyst Vijay Rakesh maintained a Neutral rating and price target of $225. Although NXP Semiconductors guided to a sequential contraction in revenues, its projections were “much better than peers,” Rakesh said in a note.

While the company continues to “execute very well” amid supply constraints and macro headwinds, “we believe near-full utilization, increasing analog supply/pricing risk, high OEM and increasing industry chip supplier inventories and relatively lower EV/SiC exposure could limit top line/ GMs,” he added.

BofA Securities: Analyst Vivek Arya reaffirmed a Buy rating and price target of $260. The company’s fourth-quarter guidance “modestly” missed expectations and management “emphasized Mobile, Industrial & IoT, and Auto segments performed as expected or better,” which is in contrast to peers indicating industrial weakness, he said.

“Gross margin notably increased to 58.5% (58.4% in Q2), suggesting efficient cost management and pricing/mix benefits carrying NXPI through industry weakness, helping maintain confidence in reaching 60% levels on future capacity expansions,” he added.

Oppenheimer: Analyst Rick Schafer reiterated an Outperform rating on the stock.

NXP Semiconductors reported in-line third-quarter results, Schafer said. “Mobile led and should lead again in 4Q on iPhone15 launch,” he added.

“Auto/core industrial ~65% sales, better than feared w/both segments up Q/Q in 3Q,” the analyst wrote. “We remain cautious entering 2024 following weaker demand commentary from OEMs and mixed results from auto peers."

Stifel: Analyst Tore Svanberg maintained a Hold rating on the stock. NXP Semiconductors reported its September quarter results at the high end of the guidance range.

“While acknowledging NXPI’s guidance came in better than peers, we believe it is still difficult to assess whether weakness will persist for the company into 1H24E, given recent weak macro data-points,” he added.

NXPI Price Action: Shares of NXP Semiconductors had risen by 3.44% to $189.10 at the time of publication Tuesday.