Needham & Company analyst Rajvindra Gill reiterated a Strong Buy rating and $120 price target on NXP Semiconductors NV (NASDAQ: NXPI) following a solid quarter and guide.

Gill commented, "While some investors might be concerned about 4Q commentary, excluding 4Q 2015, we are forecasting sales to declines 2% Q/Q (avg. 2012-2014). Possible upside could stem from content gains in auto and accelerated sales in secure connected devices. We see earnings power of $8 to $9 (CY18) with operating margins 31%+. NXPI remains the premier auto supplier with a broad-portfolio addressing ADAS levels 1-4. Moreover, we see NXPI as a compelling deleveraging play and financial earnings story as we forecast the company could generate $3 billion to $4 billion of free cash flow (10% FCF yield)."

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Shares of NXP Semiconductors NV closed at $87.44 yesterday.