Freescale Deal Synergies Could Drive NXP Semiconductors (NXPI) as High as $195/Share, Mizuho Says
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Mizuho Securities analyst Vijay Rakesh provided a preliminary merger model for NXP Semiconductors' (NASDAQ: NXPI) pending takeover of Freescale Semi (NYSE: FSL), which would create the #1 automotive semiconductor supplier worldwide and driving over $10B/yr in revenues.
"We believe the deal will create value almost immediately as synergies within the first year are expected to be ~$200M with future years exceeding $500M - though we believe it could be conservative," Rakesh
The firm is not changing their Outperform rating and $140 price target on NXPI, but said given the potential for 2017E EPS at $11-$13 with more upside from synergies, a conservative 15x multiple could drive a stock price valuation in the range of $165-$195.
Shares of NXP Semiconductors NV closed at $108.23 yesterday.
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