US Semiconductor Analyst Sees Analog Party Over, Cuts Estimates

  • Citigroup analyst Christopher Danely maintained NXP Semiconductors N.V. NXPI with a Neutral rating and reduced the price target from $190 to $150.
  • Danely maintained Microchip Technology Inc MCHP with a Neutral and slashed the price target from $72 to $62.
  • His checks indicate the pushouts and cancellations that hit Analog Devices, Inc ADI in July are impacting the rest of analog as lead times are declining. 
  • He believes weakening demand, especially in Europe, and high inventory is causing the downside. 
  • He expects NXP and Texas Instruments Inc TXN will report weakness in bookings, and he reiterates his belief that this is just the beginning of the downturn and every company/every end market will feel it.
  • He expects Microchip to feel it last, given it has the most extended lead times. 
  • Given its defensive nature, he continues to favor ADI as his top pick. 
  • Although SOX hit new lows last week, he expects it to hit new lows again as the downturn gains steam and estimates get cut. 
  • He still hopes for the three signs of a bottom in 1H23, most of the downside in estimates, capex cuts, and close-to-trough valuation on new numbers. 
  • Price Action: NXPI shares traded lower by 2.38% at $144 on the last check Tuesday.
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