Company Reports

We are upgrading our moat rating for NXP Semiconductors to wide from narrow, while raising our fair value estimate to $320 from $290 as we have greater confidence in the company’s ability to generate excess returns on capital over time. Shares appear modestly undervalued versus our new fair value estimate.

NXP Semiconductors is one of the largest suppliers of semiconductors for the automotive market and a significant player in the analog and mixed-signal chip markets generally. We believe the company has a strong position in the automotive, industrial, mobile, and communications infrastructure markets through a combination of switching costs and intangible assets. Although the company sells into cyclical industries, the strength of these competitive advantages gives us confidence that it will generate excess returns over the cost of capital over the next decade and beyond.

Narrow-moat NXP Semiconductors reported solid first-quarter results and provided investors with a nice second-quarter forecast that suggests that automotive chips are still in demand, while chip inventory levels are not spiraling out of control. We raised our fair value estimate to $290 from $240, mostly as we boosted our medium- and long-term profitability assumptions for the firm. Shares appear undervalued compared with our new fair value estimate.

NXP Semiconductors is one of the largest suppliers of semiconductors for the automotive market and a significant player in the analog and mixed-signal chip markets generally. We believe the company has a strong position in the automotive, industrial, mobile, and communications infrastructure markets through a combination of switching costs and intangible assets. Although the company sells into cyclical industries, the strength of these competitive advantages gives us confidence that it will generate excess returns over the cost of capital over the next decade.

Narrow-moat NXP Semiconductors reported solid fourth-quarter results and provided investors with a relatively upbeat first-quarter forecast. The firm’s prudent inventory management appears to be paying off as NXP may face a less severe inventory correction than some of its peers. We maintain our $240 fair value estimate and view shares as modestly undervalued.

NXP Semiconductors is one of the largest suppliers of semiconductors for the automotive market and a significant player in the analog and mixed-signal chip markets generally. We believe the company has a strong position in the automotive, industrial, mobile, and communications infrastructure markets through a combination of switching costs and intangible assets. Although the company sells into cyclical industries, the strength of these competitive advantages gives us confidence that it will generate excess returns over the cost of capital over the next decade.

Narrow-moat NXP Semiconductors reported solid third-quarter results and we're encouraged by the firm's resilient revenue guidance for the December quarter. We maintain our $240 fair value estimate and view shares as undervalued for long-term, patient investors willing to ride out some relatively bumpy conditions in near-term semiconductor demand.

In 2022, battery electric vehicles represented nearly 10% of global auto sales, up from a little less than 6% in 2021. Much of the growth occurred in China, which has been a leader in EV sales over the past decade. However, with national EV subsidies in China expiring in 2022 and far lower sales in the U.S. and Europe, the market questions if EV sales can continue to grow without subsides.

Narrow-moat NXP Semiconductors reported healthy second-quarter results and provided investors with a solid third-quarter forecast that was modestly ahead of our prior expectations, as the company is still seeing resilient demand for automotive semiconductors. We've raised our fair value estimate to $240 per share from $225 as we’re a bit more optimistic about the near term, and we view the shares as modestly undervalued.

NXP Semiconductors is one of the largest suppliers of semiconductors for the automotive market and a significant player in the analog and mixed-signal chip markets generally. We believe its has a strong position in the automotive, industrial, mobile, and communications infrastructure markets through a combination of switching costs and intangible assets. Although the company sells into cyclical industries, the strength of these competitive advantages gives us confidence that it will generate excess returns over the cost of capital over the next decade.

Narrow-moat NXP Semiconductors reported solid first-quarter results and provided investors with a second-quarter forecast that was modestly ahead of our prior expectations, as the company is seeing resilient demand for automotive and industrial semis. We maintain our $225 fair value estimate for NXP and continue to view shares as undervalued, as NXP is one of our top picks in analog and mixed signal semis.

NXP Semiconductors reported solid fourth-quarter results but provided investors with a tepid first-quarter forecast that was modestly below our prior expectations. We raised our fair value estimate for narrow-moat NXP to $225 from $210, mostly due to the time value of money as we roll our valuation model. We continue to view shares as undervalued, as we like NXP’s exposure to the secular tailwinds around rising chip content per vehicle and think the market is too focused on a near-term slowdown in demand.

NXP Semiconductors is one of the largest suppliers of semiconductors for the automotive market and a significant force in the analog and mixed signal chip markets generally. We believe the firm has a durable position in the automotive, industrial, mobile, and communications infrastructure markets due to a combination of switching costs and intangible assets. Although the company sells into cyclical industries, the strength of these competitive advantages gives us confidence that the firm will generate excess returns over the cost of capital over the next decade.

Narrow-moat NXP Semiconductors reported healthy third-quarter results but provided investors with a slightly soft fourth quarter forecast with the topline falling short of FactSet consensus estimates, as management cited a weakening macroeconomic environment. The forecast is comparable to those provided by rivals Texas Instruments and STMicro in recent days. We cut our fair value estimate to $210 from $240, but with shares trading in the mid-$140 range, we continue to view NXP as materially undervalued. We remain fond of NXP's secular tailwinds of rising chip content per car within the automotive market, and our long-term thesis remains intact.

NXP Semiconductors is one of the largest suppliers of semiconductors for the automotive market and a significant force in the analog and mixed signal chip markets generally. We believe the firm has a durable position in the automotive, industrial, mobile, and communications infrastructure markets due to a combination of switching costs and intangible assets. Although the company sells into cyclical industries, the strength of these competitive advantages gives us confidence that the firm will generate excess returns over the cost of capital over the next decade.

Narrow-moat NXP Semiconductor reported solid second-quarter results and provided investors with a healthy third-quarter forecast considering a softening macroeconomic environment. We maintain our $240 fair value estimate and continue to view shares as undervalued.

NXP Semiconductors reported solid first-quarter results and provided investors with a healthy second-quarter forecast as hearty chip demand continues to exceed supply and the company does not foresee significant limitations in China associated with its "COVID zero" restrictions. We maintain our $240 fair value estimate and continue to view the shares as fundamentally undervalued and one of the more attractive opportunities in our analog and mixed signal chip coverage. We remain bullish on NXP's prospects for gaining chip content in luxury and electric vehicles in the years ahead.

NXP Semiconductors is one of the largest suppliers of semiconductors for the automotive market and a significant force in the analog and mixed signal chip markets generally. We believe the firm has a durable position in the automotive, industrial, mobile, and communications infrastructure markets due to a combination of switching costs and intangible assets. Although the company sells into cyclical industries, the strength of these competitive advantages gives us confidence that the firm will generate excess returns over the cost of capital over the next decade and thus warrants a narrow economic moat rating.

Narrow-moat NXP Semiconductor reported solid fourth-quarter results and provided investors with an upbeat outlook for the March quarter amid the global semiconductor shortage. We will raise our fair value estimate to $240 from $235 and view shares as undervalued.

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.