Deutsche Bank downgrades NXP Semiconductors NV (NASDAQ:NXPI) to Hold from Buy as the shares are trading near the all cash/share take-out price from Qualcomm of $110/share. It continues to expect the acquisition of NXP Semiconductors by Qualcomm to close by the end of CY17, at the take-out price announced on 10/27/16 of $110/share in cash. While some investors may push for a higher price, the lack of a viable second bidder (proxy indicates NXP was unsuccessful in finding one) leaves the firm to believe Qualcomm is unlikely to pay a meaningfully higher price.
The firm's $110 P/T is based on the cash/share take-out price from Qualcomm. Key upside/downside risks include legal/regulatory/shareholder approvals required for completion of the acquisition of NXP Semiconductors by Qualcomm, macro, profitability improvement execution, demand volatility within the Auto market (~37% of revs) and design win/product execution.