NXP Semiconductors (NXPI) Would be Worth $140-$160/Share Based on Average Valuation for Semiconductor Deals - Deutsche Bank

September 29, 2016 3:52 PM EDT
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Price: $100.64 -1.18%

Rating Summary:
    25 Buy, 2 Hold, 0 Sell

Rating Trend: Down Down

Today's Overall Ratings:
    Up: 11 | Down: 23 | New: 30
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Deutsche Bank analyst Ross Seymore commented on NXP Semiconductors (NASDAQ: NXPI) following rumors earlier that the company is in talks to be acquired by Qualcomm (NASDAQ: QCOM). Based on the average valuation for semiconductor deals since 2014, NXP Semiconductors could fetch $140-$160 per share, said the analyst.

Seymore explained, "Earlier this afternoon multiple press reports (Dow Jones, WSJ, etc.) have cited that Qualcomm Inc. is in discussions to acquire NXP Semiconductors for over $30b, with a deal possible in the next two to three months. In reaction to the news, NXPI shares have risen ~15% and now imply a ~$33b market cap. At this level, NXPI shares trade at 2017E P/E (adjusted GAAP EPS) of ~15x and EV/EBITDA of ~12x. For reference, the average valuation for semiconductor deals since 2014 has been at a ~25x P/E, ~18x EV/EBITDA and average price premium to prior close of ~30%. While we have no incremental knowledge about the validity of these reports, should NXP be acquired at the equivalent of these multiples, it would imply a share price range of $140-$160 (~$50-55b market cap) with the typical ~30% premium to the prior close implying a much lower $110."

Deutsche Bank has a Buy rating on NXP Semiconductors with a price target of $110.

For an analyst ratings summary and ratings history on NXP Semiconductors NV click here. For more ratings news on NXP Semiconductors NV click here.

Shares of NXP Semiconductors NV closed at $82.24 yesterday.

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