NXP Semiconductors Stock Gains On Morgan Stanley’s Upgrade, But Retail’s Feeling Bearish

Shares of NXP Semiconductors NV (NXPI) gained over 3% in mid-day trade on Wednesday after analysts at Morgan Stanley upgraded the stock to ‘Overweight’ from ‘Equal Weight.’

The brokerage also hiked its price target for the NXPI stock to $257 from $231, implying an upside of over 18% from current levels.

Underscoring its bullish outlook for the Dutch chipmaker, Morgan Stanley noted that cyclical and secular tailwinds for the company are aligning, which could provide an impetus to the stock this year.

Analysts at the brokerage believe that despite underperforming in 2024, NXPI is well set to outgrow other auto semiconductor stocks in 2025, as the worst of the customer inventory backlogs have now been addressed.

They also highlighted that NXPI has undertaken structural improvements to its business, which should drive margin growth in fiscal year 2025.

Lastly, Morgan Stanley analysts believe that the downcycle for microcontroller units (MCU) has reached its end and that NXPI is the best positioned to take advantage of this.

This comes after NXPI posted earnings per share (EPS) of $3.18 during the fourth quarter (Q4), slightly ahead of an estimated $3.16. Its $3.11 billion revenue slightly fell short of expectations of $3.12 billion.

The Dutch chipmaker has guided for an EPS in the range of $2.39 to $2.79 during the first quarter (Q1) of fiscal 2025, compared to an estimate of $2.61.

Retail sentiment on Stocktwits around the NXPI stock was in the ‘bearish’ (40/100) territory despite the upbeat outlook of Morgan Stanley analysts.

NXPI sentiment and message volume February 12, 2025, as of 2 pm ET | Source: Stocktwits

NXP Semiconductors’ stock price has been downward recently, falling over 9% in the past six months. Its performance over the past year has been only slightly better, with a decline of a little over 8%.

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