Morgan Stanley said it sees "structural improvement" in the company's margins.

"We have been on the sidelines in NXPI since QCOM bid for the company in September 2016. But with the stock underperforming the SOX by 102% and peers by 73% during the last 3 years, and importantly structural improvement in the company's margins along with capital allocation optionality, it's time to revisit the name. Given the ongoing risks of the cycle, we recommend an opportunistic approach when adding to positions in NXPI. We are increasing our target multiple by 2 turns to 15x (including stock based comp), which is less than the 4x turn expansion seen at analog and MCU peers the last few years. We think this multiple could prove conservative as NXP's margins expand, as it would only bring it back to the stock's median despite improving mix and higher margins."