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NXP Semiconductor (NXPI) pulled back for a day and a half last week toward its breakout level of $80. It rallied to a new high at 86.50 and finished the week 84.79 up 3%. The advance was fueled, in part, by very positive comments by Apple’s (AAPL) CEO Tim Cook about the widespread adoption of Apple Pay. Apple’s mobile payment system uses NXPI’s near field communications chips (NFC) for security and more efficient battery usage in iPhones. The announcement that both American Express (AXP) and the Federal government would begin accepting Apple Pay contributed to the excitement.
NXP Semiconductors reported 4th quarter earnings before the opening on Thursday February 5th. They beat expanded estimates by $0.03 and guided in the mid-range for 2015. The stock saw profit taking after they reported and was unable to break out of its trading range in spite of the positive comments from management.
The following day, however, was a different story as 2 Wall Street research firms, Susquehanna and Canaccord, raised their price targets on NXPI to 95 and 97 respectively. The stock responded by breaking out above the $80 resistance area to close at $82.29 up 4.02 on the day. After pulling back early last week to 80.5, NXPI reached near-term resistance at 86 - 86.5 area and finished the week at 84.79. With the Semiconductor group leading the market higher, NXPI should continue to make new highs in line with Wall Street price targets in the 95 -97 area.
NXP Semiconductors designs and manufactures an optimized, integrated mix of analog and digital chips for its customers in the automotive, wireless, lightening and mobile area. Its near field communications chips are a source of power efficiency and are central to the iPhone 6 and its Apple Pay mobile payment capability. NXPI is also benefiting from the rapid introduction of credit cards with embedded communications chips.
The company’s automotive business is growing rapidly as luxury cars are incorporating more wireless communications capability. The automotive business was cited by management, in itsearnings conference call as a rapidly growing market segment for NXPI.
Buy NXPI on any short-term dips.
NXP Semiconductor has a bullish Chaikin Power Gauge stock rating which is driven by Industry Group strength in Semiconductors, a strong earnings trend and projected earnings growth, positive trends in analyst estimates revisions as well as positive technicals.
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The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.
The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.
