On Tuesday, NXP Semiconductors NV (NASDAQ:NXPI) shares edged slightly lower despite receiving a price hike from Cowen. The first raised its stock price target for NXP to $265 per share from $255, maintaining an outperform rating. Analyst Matthew Ramsay cited the rapidly growing electric vehicles market and the potential increase in demand for content as a major catalyst for semiconductor stocks.
The analyst thinks increased consumer awareness about electric vehicles, coupled with improving economic conditions and government support will help drive the semiconductor industry growth for the next ten years and beyond.
The analyst also highlighted ON Semiconductor Corp (NASDAQ:ON), STMicroelectronics and Wolfspeed Inc. (NYSE:WOLF) as potential hot picks for the growth phase.
Time to bet on NXP’s growth prospects?
From an investment perspective, NXP Semiconductors shares trade at an attractive forward P/E ratio of 18.51, making the stock an exciting option for bargain hunters.
Moreover, analysts expect its earnings per share to increase at an average annual rate of 21.74% over the next five years compared to an annual decline of 50.40% in the previous five.
Therefore, the stock could also gain the interest of long-term growth investors.
Technically, ON Semiconductors shares seem to have recently pulled back to complete a downward breakout from an ascending channel formation. As a result, the stock avoided surging into overbought conditions, thus creating an opportunity to buy.
Therefore, investors could target rebound profits at about $228.96, or higher at $238.97. On the other hand, $209.76 and $199.18 are crucial support levels.
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