NXPI Stock Gets a Pre-Earnings Boost on Bull Note

The analyst also lifted its price target to $125 from $110

Deputy Editor
Jul 29, 2019 at 11:44 AM
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Dutch tech name NXP Semiconductors N.V. (NASDAQ:NXPI) is getting a boost today, after Evercore ISI upgraded the stock to "outperform" from "in line," and raised its price target to $125 from $110. Evercore's bull note touched on the firm's second-quarter earnings, which are slated for release after the close tonight, with the analyst predicting that the report will "likely be good enough for investors, given the current demand backdrop."

Evercore's $125 estimate is well above the stock's consensus 12-month target price of $116, and sits near NXPI's all-time high of $125.93 from February 2018. And while 10 analysts call the equity a "buy" or better, seven still consider the semiconductor concern a "hold." 

Options traders have begun to ramp up their bullish bets ahead of NXPI's earnings report, however. In the last 10 days, 2.27 calls have been bought to open for every put on the International Securities Exchange (ISE), Cboe Options Exchange (CBOE), and NASDAQ OMX PHLX (PHLX) -- up from its week-ago reading of 0.82. 

Meanwhile, short interest fell almost 30% in the last reporting period to 5.52 million shares. This represents only 2.2% of the stock's available float, and just 1.4 days of trading, at NXPI's average volume. 

Looking at NXPI's past eight post-earnings moves, the security has only ended positive two times during the last two years. However, these constitute a massive 12.1% swing higher last November, and a 7.9% gain in April. This time around, the options market is pricing in a 9.3% next-day move -- much wider than its average post-earnings move of 4.8% over the last eight quarters. 

Today, the stock has risen 1.9% to trade at $104.28, testing its footing atop the $102 region -- which NXPI gapped atop just last week after its 200-day moving average provided a springboard on the charts. Now, the security is trading just below its two-month high of $106.25, and is up 42% year-to-date. 

nxpi stock daily price chart on july 29

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