NXP Stock Surges Toward Best Day In A Year After ‘Beat And Raise’ Q1: Analyst Sees Catalyst Cocktail Driving Gains

• NXP reported Q1 revenue and profit above expectations; it’s Q2 forecasts were above expectations.
• NXPI stock jumped 16.5% in Wednesday’s premarket trading.
• Stocktwits sentiment for NXPI climbed multiple points in the ‘extremely bullish’ zone.

U.S.-listed shares of NXP Semiconductors NV surged 16.5% in early premarket trading on Wednesday, after the Dutch chip giant reported upbeat quarterly results and a forecast. If the gains hold, it would be the stock’s best single-day performance since April last year.

NXP makes chips and devices such as microcontrollers, processors, and sensors used in cars, mobile devices, IoT gadgets, and industrial machines. Its strong results signal a potential recovery in the under-pressure automotive market.

NXP’s Results, Forecast

NXP ​forecasts fiscal second-quarter revenue between $3.35 billion ​and $3.55 billion, compared with estimates of $3.27 billion, according ‌to estimates from LSEG/Reuters. It expects quarterly adjusted profit per share between $3.29 and $3.72, above the estimate of $3.17.

The performance was driven by “broad-based improvement across all of our focus end markets, led by our company-specific growth drivers,” NXP CEO Rafael Sotomayor said. Analog chipmaker ​Texas Instruments ​also ⁠provided a strong forecast last week, bolstered by data center and ​industrial chip demand.

In the first quarter, NXP’s revenue increased 12% to $3.18 billion, beating estimates of $3.16 billion from LSEG/Reuters. Adjusted profit came in at $3.05 per share, also higher than estimates of $2.95 per share.

Sales from the automotive segment, which accounts for over half of the company's top line, increased by 6%.

Retail, Analyst View On NXPI

On Stocktwits, the retail sentiment for NXPI shifted higher in the ‘extremely bullish’ zone (93/100) on Wednesday, with message volume for the ticker jumping over 500% in the past 24 hours.

“NXP lucky to get in before earnings dropped this week, wouldn’t be surprised if we push 300,” a trader wrote. 

Another trader said: “The numbers are breakout but I also wonder how much of this is the hype of management making a savy diversification toward robotics. Same lidar they’ve been working with car manufacturers on will be the same used in robotics. I just wonder if that’s the inside scoop? Either way so good to finally see this get some props.”

Jefferies raised its price target on the stock to $300 from $265 and maintained a ‘Buy’ rating. 

The company reported a clean "beat-and-raise," adding that data center revenue is trending toward $500 million this year, and the Industrial & Internet of Things business overall is seen as a standout at $628 million, the research firm said in an investor note. 

Following the stock's recent underperformance, the firm sees room for some multiple catch-up as the cyclical recovery, secular content story, and now the data center narrative all play through, Jefferies said.

As of their last close, NXPI shares were 7% year to date.

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