NXPI changes
Pick any two versions below to diff them.
- Price
- $259.61 → $269.51(+3.8%)
- Discount category
- Below intrinsic value → Close to intrinsic value
- Thesis
- The market fears that NXP's strong 2026 growth is a short upturn of the car chip cycle and not a lasting trend. Revenue grew 19% in Q2 and in Q3 2026 after two years of falls, but channel inventory stayed at 11 weeks, up from 9 weeks a year earlier, so part of the growth may be customers that refill stock. The stock fell 7% the day after the Q2 report and 18.5% in July 2026. Car demand, tariffs and trade measures between the US and China add doubt, and China gave 17% of Q3 2026 revenue. removed: On October 8, 2026, Citi cut its rating to Neutral because estimates for NXP rise less than for other chip companies. For the gap to close, NXP must show that the growth continues after the restocking ends. The Q3 2026 report passed the first test: revenue was above the middle of guidance, and the Q4 guidance shows growth of 15% from a year earlier at the middle. The next checks are clear. Q4 2026 revenue must reach at least the $3.85 billion middle of guidance. Channel inventory must stay near 11 weeks and not rise more. Automotive revenue must keep growing from a year earlier, and the Q1 2027 guidance must be above Q1 2026 revenue. Net leverage, 1.3 times at the end of Q3 2026, must stay low while NXP pays dividends and buys back stock. The next evidence comes with the Q4 2026 report in early 2027. If these checks pass, the gap can close over the next two to four quarters. If car production falls or customers cut stock, the gap can last into 2028.
- Recent events
- Oct 27, 2026: NXP reported Q3 2026 revenue of $3.79 billion, up 19% from a year earlier and above the middle of its guidance. Automotive revenue grew 13% to $2.07 billion, and Industrial and IoT revenue grew 39%. Non-GAAP gross margin was 58.6%, and non-GAAP EPS was $4.20. Channel inventory stayed at 11 weeks. Free cash flow was $1.21 billion. NXP guided Q4 2026 revenue to $3.75 billion to $3.95 billion, up 15% from a year earlier at the middle. In October 2026, the board authorized $5 billion of share buybacks, in addition to the $1.3 billion that remained under the earlier authorization. Oct removed: 8, 2026: Citi cut its rating on NXP from Buy to Neutral and its price target from $370 to $260. The stock fell 2.6% before the market opened. Earlier that week, Stifel cut its target from $282 to $265. Oct 6, 2026: NXP said that it will report Q3 2026 results on October 27, 2026, after the US market closes. Sep 1, 2026: NXP signed a $250 million unsecured loan facility with the European Investment Bank to expand its assembly and test plant in Kuala Lumpur, Malaysia. Loans can have a tenor of up to six years. Aug 28, 2026: NXP declared a Q3 2026 dividend of $1.014 per share, paid on October 8, 2026. Jul 28, 2026: NXP reported Q2 2026 revenue of $3.50 billion, up 19% from a year earlier, with growth in all end markets. Non-GAAP gross margin was 58.0%, and non-GAAP EPS was $3.61. Free cash flow was $791 million. It guided Q3 2026 revenue to $3.65 billion to $3.85 billion. The stock fell 7% on the next day, and it fell 18.5% in July 2026. Apr 28, 2026: NXP reported Q1 2026 revenue of $3.18 billion, up 12% from a year earlier, and non-GAAP EPS of $3.05. GAAP results included a gain of $627 million on the sale of its MEMS sensors business to STMicroelectronics, which closed on February 2, 2026 for $878 million in cash. The stock rose 25.6% that day. Apr 20, 2026: NXP repaid $750 million of 3.875% senior notes due June 2026 with cash.