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Investing.com -- Citi upgraded NXP Semiconductors NV (NASDAQ:NXPI) to "Buy" from "Neutral" and raised its price target to $290 from $210 citing an imminent recovery in the analog market.
“We are upgrading NXPI from Neutral to Buy as we believe the analog recovery is imminent and that every analog company will feel it as sales from the analog companies have fallen,” analyst at Citi said.
The brokerage pointed to Analog Devices (NASDAQ:ADI)' recent commentary signaling a rebound in the industrial segment, which Citi believes will benefit all analog companies after a roughly 30% decline from peak sales.
While Citi expects continued weakness in the automotive market, it sees industrial sector growth offsetting some of the downside.
Citi also noted that consensus estimates for NXP have dropped about 30% in the past six months, suggesting most of the downside has already been priced in. The firm expects NXP's valuation multiples to expand by 30-40% during the recovery.
“While we believe there is still downside from the Automotive end market, the recovery in the Industrial end market should partially offset it,” analyst added.
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