Story updated at 9:55 a.m. to reflect market activity.
Shares of NXP Semiconductor were falling 1.9% to $74.66 in morning trading.
The analyst firm set a price target of $100 for the chipmaker. Oppenheimer set its EPS estimates for NXP Semiconductors at $4.73 a share for 2014, and $5.60 a share for full year 2015.
Analyst Rick Schafer wrote, "Despite the ~70% run-up in share price YTD, we believe the NXP growth story is far from over, given multiple structural and secular tailwinds. NXP is amongst the best positioned names in our coverage universe to capitalize on rising semiconductor content in key verticals including auto, industrial and communications while maintaining the dominant franchise in the growing secure ID, secure transactions and mobile payment markets."
Separately, TheStreet Ratings team rates NXP SEMICONDUCTORS NV as a Hold with a ratings score of C+. TheStreet Ratings Team has this to say about their recommendation:
"We rate NXP SEMICONDUCTORS NV (NXPI) a HOLD. The primary factors that have impacted our rating are mixed -- some indicating strength, some showing weaknesses, with little evidence to justify the expectation of either a positive or negative performance for this stock relative to most other stocks. The company's strengths can be seen in multiple areas, such as its robust revenue growth, notable return on equity and good cash flow from operations. However, as a counter to these strengths, we also find weaknesses including unimpressive growth in net income and generally higher debt management risk."
Highlights from the analysis by TheStreet Ratings Team goes as follows:
- NXPI's revenue growth has slightly outpaced the industry average of 18.7%. Since the same quarter one year prior, revenues rose by 21.3%. This growth in revenue does not appear to have trickled down to the company's bottom line, displayed by a decline in earnings per share.
- The company's current return on equity greatly increased when compared to its ROE from the same quarter one year prior. This is a signal of significant strength within the corporation. Compared to other companies in the Semiconductors & Semiconductor Equipment industry and the overall market, NXP SEMICONDUCTORS NV's return on equity significantly exceeds that of both the industry average and the S&P 500.
- Compared to its closing price of one year ago, NXPI's share price has jumped by 75.23%, exceeding the performance of the broader market during that same time frame. Setting our sights on the months ahead, however, we feel that the stock's sharp appreciation over the last year has driven it to a price level which is now relatively expensive compared to the rest of its industry. The implication is that its reduced upside potential is not good enough to warrant further investment at this time.
- The debt-to-equity ratio is very high at 6.50 and currently higher than the industry average, implying increased risk associated with the management of debt levels within the company. Even though the debt-to-equity ratio is weak, NXPI's quick ratio is somewhat strong at 1.05, demonstrating the ability to handle short-term liquidity needs.
- The company, on the basis of change in net income from the same quarter one year ago, has significantly underperformed when compared to that of the S&P 500 and the Semiconductors & Semiconductor Equipment industry. The net income has decreased by 21.9% when compared to the same quarter one year ago, dropping from $155.00 million to $121.00 million.
- You can view the full analysis from the report here: NXPI Ratings Report