BofA Securities Deep Dive on NXP Semiconductors NV (NXPI) Yields 4 Positives

March 26, 2021 7:06 AM EDT
Get Alerts NXPI Hot Sheet
Price: $208.70 -0.23%

Rating Summary:
    24 Buy, 8 Hold, 0 Sell

Rating Trend: = Flat

Today's Overall Ratings:
    Up: 17 | Down: 13 | New: 47
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BofA Securities analyst Vivek Arya reiterated a Buy rating and $240.00 price target on NXP Semiconductors NV (NASDAQ: NXPI) on the belief that the recent inclusion of the stock in the S&P 500 index could enhance investor awareness, as the company benefits from broad-based cyclical and secular growth drivers. The analyst highlighted 4 positives:

1) Autos: 47% of sales, 14% sales growth CAGR driven by robust cyclical recovery NXP leadership in digital clusters, 77 GHz radar, EV battery management systems, Domain controllers, Ultra Wideband, compute for safer/autonomous vehicles

2) Industrials/IoT: 22% of sales, 11% sales CAGR driven by broad microcontroller portfolio, growing WiFi attach, edge-processing

3) Comms Infra: 17% of sales, growing 4% annually as 5G GaN amplifiers offset declines in legacy networking

4) Mobile: 14% of sales, 9% CAGR on secure mobile wallet, Ultra wideband attach.

The analyst stated "we find valuation compelling at 18x PE and 21x EV/FCF our CY22E, which is 4-6 turns below diversified semi peers/SPX Industrials, despite faster growth and similar/better FCF margins. Growing FCF generation/returns, march towards ~$12/sh in potential CY23E pf-EPS, and closing valuation gap could help drive significant upside in our view."

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 $191.31 yesterday.

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