NXP Semiconductors NV (NASDAQ: NXPI) was down about 8% in recent sessions despite reporting market-beating financials for its Q1.
Investors are responding primarily to Kurt Sievers announcing plans to step down as the chief executive of the semiconductor giant at the end of this year.
NXP, however, named Rafael Sotomayor as its new president, effective immediately.
Including today’s loss, NXP stock is down about 25% versus its year-to-date high in February.
Investors dislike surprise moves amidst macro uncertainty
NXP confirmed that Sievers has decided to retire due to personal reasons – there weren’t any issues with the board or the overall performance of the company.
But the transition was not at all expected. So, “I’m a little surprised,” said Stacy Rasgon, a senior Bernstein analyst, in an interview with CNBC today.
Rasgon also said that the post-earnings sell-off in NXP shares was justified, given that Sievers “was pretty well-liked in the investment community.”
Plus, the macro environment is unusually uncertain at present, which makes the leadership change a bit unsettling for investors.
Note that Kurt Sievers has been with NXP Semiconductors for about three decades.
NXP’s guidance wasn’t all that encouraging either
Investors are bailing on NXP stock this morning also because its second-quarter guidance wasn’t particularly encouraging either.
On an adjusted basis, the semiconductor behemoth guided for $2.66 a share of earnings for Q2, which came in only in line with Street estimates.
CEO Sievers cited tariffs-driven uncertainty for a muted outlook that makes sense, given hardly “anybody has any visibility, especially into the second half of 2025,” as per the Bernstein analyst.
Stacy Rasgon finds NXP’s auto and industrial businesses more attractive than its mobile unit and communications infrastructure – yet the former two came in shy of consensus in the first quarter.
NXP shares do, however, pay a dividend yield of 2.24% at writing, which makes it more attractive to own in 2025.
Should you buy NXP stock on the post-earnings dip today?
According to Stacy Rasgon, while NXP stock is not particularly cheap even after the post-earnings dip, it does look “cheaper than some of its rivals in my coverage.”
On Tuesday, the Bernstein analyst maintained his “market perform” rating on NXP shares.
But his $225 price target on the semiconductor stock indicates about a 25% upside from current levels.
However, Rasgon is among some of the more dovish analysts on NXP Semiconductors NV.
The consensus rating on the semiconductor manufacturing and design company based out of Eindhoven, Netherlands, currently sits at “overweight”.
Street sees upside in NXP to $236 on average, which indicates potential for a more than 30% rally from here.
And on top of that, there’s the dividend yield tied to the semiconductor stock as mentioned before.
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