Analysts at Citigroup have upgraded the rating of NXP Semiconductors (NXPI.US) to "buy" as the market for analog chips is expected to recover soon.

Citi released a research report, upgrading the rating of NXP Semiconductors (NXPI.US) to "buy" from "neutral", and raising the target price to US$290 from US$210. The recent earnings of its rival Analog Devices (ADI.US) indicated that the market for analog chips "is about to" recover. Citi analyst Christopher Danely said: "Analog Devices said the analog terminal market would recover, and then we raised NXP's rating from neutral to buy because we believe the recovery of the analog chip market is coming, and every analog chip company will feel it because their sales have dropped about 30% from the peak." The analyst added: "Although we still think there is room for the automotive terminal market to go down, the recovery of the industrial terminal market should offset the impact to some extent. Considering that the general expectation has dropped about 30% in the past six months, most of the downward space has been digested, so we expect NXP's P/E ratio to rise as the expectation rises." As of the time of writing, NXP was up 3.88% before the market opened to US$255.10.