NXP Establishes a Strong Medium-Term Revenue Forecast, Thanks to High Growth Chips; $235 FVE

NXP’s Analyst Day was highlighted by presentations focused on “accelerated growth” products, which management believes will enable the firm to generate 8%-12% revenue growth over the next three years, which represents bullish assumptions that are ahead of FactSet consensus and our prior expectations. We received greater insight into NXP’s recent progress in many growth areas, as well as expectations for the company’s all-important automotive and industrial business segments. As such, we raise our fair value estimate for narrow moat NXP to $235 per share from $219. Our new revenue forecast is still not as bullish as management’s targets, as we think a lot will still have to go right from a macroeconomic picture for NXP to benefit from such growth. Shares were up modestly after the event, but we still see a slight margin of safety for investors.