Valued at a market cap of $59.5 billion, NXP Semiconductors N.V. (NXPI) offers various semiconductor products, including microcontrollers, application processors, wireless connectivity solutions, radio frequency power amplifiers, and security controllers. These products are used in a wide range of applications, including automotive, wireless infrastructure, lighting, industrial, mobile, and computing. The Eindhoven, Netherlands-based company is expected to announce its fiscal Q3 earnings results on Monday, Nov. 4.
Ahead of this event, analysts expect the tech company to report a profit of $3.03 per share, down 8.5% from $3.31 per share in the year-ago quarter. The company has surpassed Wall Street's earnings estimates in three of the last four quarters while missing on another occasion.
Its adjusted earnings of $2.80 per share for the last quarter slightly missed the consensus estimate. The results were impacted by a decline in revenue from its automotive and communications infrastructure market.
For fiscal 2024, analysts expect NXPI to report an EPS of $11.97, down 5.8% from $12.70 in fiscal 2023. Nevertheless, EPS is expected to grow 12.2% year-over-year to $13.43 in fiscal 2025.
Shares of NXPI have gained 1.3% on a YTD basis, significantly underperforming both the S&P 500 Index's ($SPX) 22.5% rise and the Technology Select Sector SPDR Fund’s (XLK) 19.2% return over the same period.
NXPI’s slower-than-expected recovery from bloated inventory levels, stagnant automotive demand, and escalating tensions between the U.S. and China have contributed to its underperformance.
Moreover, shares of NXPI fell 7.6% after its Q2 earnings release on Jul. 22. The company reported revenues of $3.1 billion which met the consensus estimates but dropped 5% from a year ago. Its 7.5% annual decline in net income to $896 million, with a 7% year-over-year fall in non-GAAP operating income to $1.1 billion, might have dampened investor confidence.
On Oct. 15, Bloomberg reported that the Biden administration is discussing capping sales of advanced AI chips on a country-specific basis. The news negatively impacted investor sentiments, leading to a significant decline in chip stocks, including a 4.4% drop in NXPI’s stock.
Analysts' consensus view on NXP Semiconductors’ stock is moderately optimistic, with a "Moderate Buy" rating overall. Among 24 analysts covering the stock, 14 recommend a "Strong Buy," two suggest a "Moderate Buy," seven indicate a “Hold,” and one recommends a “Strong Sell.”
The average analyst price target for NXPI is $289.52, indicating a 24.4% potential upside from the current levels.