Q2 performance stability + Q3 guidance exceeds expectations. Goldman Sachs Group, Inc. raises target price for NXP Semiconductors NV (NXPI.US) to $276.

date
23/07/2025
avatar
GMT Eight
Goldman Sachs rates NXP stock as "buy" with a 12-month target price of $276, representing a 21% upside from the stock's closing price of $228.0 on Tuesday.
Dutch chip maker NXP Semiconductors NV (NXPI.US) recently announced its second-quarter performance for 2025. Goldman Sachs Group, Inc. published a research report stating that NXP Semiconductors NV's second-quarter performance met market expectations, and its third-quarter performance guidance exceeded market expectations, indicating that the analog chip industry is in the early stages of recovery. However, Goldman Sachs Group, Inc. also added that as investors' expectations were already high before the financial report was released, NXP Semiconductors NV's stock price may experience a pullback. Goldman Sachs Group, Inc. has a "buy" rating on NXP Semiconductors NV's stock with a 12-month target price of $276, representing a 21% increase from the stock's closing price of $228.0 on Tuesday. Specifically, NXP Semiconductors NV's Q2 revenue was $2.93 billion, in line with Goldman Sachs Group, Inc.'s expectations, higher than the market's general expectation of $2.90 billion; adjusted gross margin was 56.5%, in line with Goldman Sachs Group, Inc.'s expectations, slightly higher than the market's general expectation of 56.3%; adjusted earnings per share were $2.72, slightly lower than Goldman Sachs Group, Inc.'s expectation of $2.76, but higher than the market's general expectation of $2.67. Revenue by segment: automotive revenue was $1.73 billion, slightly lower than Goldman Sachs Group, Inc.'s expectation of $1.74 billion, but in line with the market's general expectation; industrial and IoT revenue was $546 million, higher than Goldman Sachs Group, Inc.'s expectation of $538 million and the market's general expectation of $534 million; mobile revenue was $331 million, higher than Goldman Sachs Group, Inc.'s expectation of $324 million and the market's general expectation of $325 million; communication infrastructure and other revenue was $320 million, slightly lower than Goldman Sachs Group, Inc.'s expectation of $321 million, but higher than the market's general expectation of $316 million. Additionally, in the third-quarter performance guidance released by NXP Semiconductors NV, the midpoint of the revenue guidance range was $3.15 billion, basically in line with Goldman Sachs Group, Inc.'s expectation, higher than the market's general expectation of $3.08 billion; gross margin guidance was 57.0%, slightly higher than Goldman Sachs Group, Inc.'s expectation of 56.7%, in line with the market's general expectation; adjusted earnings per share guidance was $3.10, lower than Goldman Sachs Group, Inc.'s expectation of $3.22, but higher than the market's general expectation of $3.07. Goldman Sachs Group, Inc. stated that although NXP Semiconductors NV released solid second-quarter performance and better-than-expected third-quarter performance guidance, the stock price may experience a pullback due to high investor expectations before the financial report was released. Goldman Sachs Group, Inc. believes that investors' increased expectations for NXP Semiconductors NV's performance were mainly due to more optimistic comments from its peers at recent conferences. However, Goldman Sachs Group, Inc. pointed out that compared to its peers, NXP Semiconductors NV's public statements have been more restrained, partly due to macroeconomic uncertainty, especially in parts of the automotive industry affected by tariffs. It is worth noting that the company's channel inventory remained unchanged in the second quarter (9 weeks), indicating that the performance improvement is likely due to improved end demand rather than inventory replenishment. Goldman Sachs Group, Inc. stated that investors will focus on NXP Semiconductors NV management's comments on the following areas: trends in automotive business orders; the speed of channel inventory replenishment in the coming quarters; signs of pre-release demand as described by competitors; and the specific progress of the company's design-in on the S32 automotive processing platform. Goldman Sachs Group, Inc. said that the target price of $276 for NXP Semiconductors NV is based on a P/E ratio of 19 times, with the main downside risks facing this target price being: a weakening in automotive end demand; uncertainty in the timing and path of recovery; and an unfavorable pricing environment.