--- title: "Melexis grew 3% while NXP grew 13% and Allegro 15% in cars, and two banks cut its targets" description: "Third-quarter profit rose 14% and the shares still fell 3.5%. The argument now is whether a supplier growing 3% on a 6.4% dividend yield is a safe way to own semiconductors, or one losing its place in cars to NXP and Allegro." publisher: "The Inference" section: "Chips" published: 2026-10-31T14:07:08.134Z modified: 2026-10-31T14:07:08.134Z canonical: https://theinference.org/article/melexis-grew-3-while-nxp-grew-13-and-allegro-15-in-cars-and-two-banks-cut-its-targets language: en keywords: "Semiconductors, Automotive, Earnings, Analyst Ratings, Dividends" --- # Melexis grew 3% while NXP grew 13% and Allegro 15% in cars, and two banks cut its targets > Third-quarter profit rose 14% and the shares still fell 3.5%. The argument now is whether a supplier growing 3% on a 6.4% dividend yield is a safe way to own semiconductors, or one losing its place in cars to NXP and Allegro. Melexis reported a better quarter and was punished for it. On October 28 the Belgian designer of magnetic sensors and motor-driver chips for cars posted [third-quarter sales of EUR 223.7 million](https://www.marketscreener.com/news/melexis-n-q3-2026-results-a-third-quarter-sales-of-223-7-million-eur-ce785cd2d980fe20), up 4% year on year, gross margin of 40.7% and net profit up 14% at EUR 31.3 million [1]. Earnings per share of EUR 0.78 still landed under the EUR 0.86 average of four analysts' estimates [2]. Chief executive Marc Biron called the quarter "in line with expectations" [1]. [The stock fell 3.5% on the day](https://www.lalibre.be/economie/placements/2026/10/28/melexis-gagne-14-de-benefice-supplementaire-et-perd-35-en-bourse-D4FUEHYXXVEIXOM3QOCILKBXL4/) [4] and closed at EUR 56.10 on October 30, 35 cents above its 52-week low [3][10]. The next morning two banks cut their price targets. ## Three against thirteen and fifteen Deutsche Bank analyst Robert Sanders [cut his target from EUR 75 to EUR 65](https://nl.marketscreener.com/beursnieuws/deutsche-bank-verlaagt-koersdoel-melexis-stevig-ce785cd3dc8eff21) and kept Hold, on simple arithmetic: Melexis grew 3% at constant currency, while [NXP](https://theinference.org/markets/companies/nxp), the far larger Dutch automotive chipmaker, grew its car business 13% on the S32 in-car computing platform, and [Allegro](https://theinference.org/markets/companies/allegro-microsystems), the US sensor-chip rival, grew automotive sales 15% in its June quarter [5]. NXP's [own release confirms the 13%, on automotive revenue of $2.07 billion](https://markets.businessinsider.com/news/stocks/nxp-semiconductors-reports-third-quarter-2026-results-1036672944) [8]. Sanders called market-share loss and margin pressure in lighting chips a persistent headwind, and noted the awkward fact that consensus already assumes 9.3% growth for Melexis in 2027, a rate the company has yet to demonstrate [5]. *Chart: **Melexis grew 3%; chips going into the same cars grew 13% and 15%** Bar chart comparing year-on-year automotive chip revenue growth: Melexis 3% at constant currency per Deutsche Bank, NXP automotive 13%, Allegro automotive 15%* *Year-on-year revenue growth, %. Melexis: total sales at constant currency, Q3 2026, per Deutsche Bank. NXP: automotive segment, Q3 2026, company release. Allegro: automotive, quarter ended June 2026, per Deutsche Bank. [5][8]* ## The design wins follow the factories Biron [told Reuters](https://www.tradingview.com/news/reuters.com,2026:newsml_L5N46E1PP:0-melexis-ceo-says-china-now-beats-europe-in-new-design-wins/) that China now books more new design wins than Europe [7]. A design win is the slot a chip earns inside a car program, usually years before volume ships. [Jefferies](https://theinference.org/markets/companies/jefferies) put numbers on the shift: China was Melexis's strongest region with record third-quarter revenue, while Europe's share of sales fell from 31% to 27% [6]. The company signed a master purchase agreement with the Chinese carmaker BYD and shipped its first chip made through a China-localized manufacturing model [1]. Asia-Pacific took 65% of quarterly sales, up from 61% a year earlier [2]. *Chart: **Asia-Pacific keeps taking share of Melexis's sales from Europe** Column chart of Melexis sales by region: Asia-Pacific 61% in Q3 2025 to 65% in Q3 2026, Europe 31% to 27%* *Share of Melexis quarterly sales, %. Asia-Pacific per the company's third-quarter results; Europe's share per Jefferies. [2][6]* ## The safety case, and the leak in it Jefferies kept Buy and [cut its target from EUR 94 to EUR 78](https://www.deaandeelhouder.be/nieuws/2026/10/29/beursblik-jefferies-verlaagt-koersdoel-melexis-3/), valuing Melexis at 18.9 times expected 2027 earnings [6]. Because the company barely touches AI data centers, the bank called it a relatively safe way to stay invested in semiconductors while the AI trade is sold off, with a second leg in humanoid robotics: position sensors and motor drives for the Optimus robot program, though revenue only arrives from 2028 [6]. [The trailing EUR 3.70 dividend yields 6.37%](https://uk.finance.yahoo.com/quote/MEX.DE/key-statistics/) [10]. Against that, [X-FAB](https://theinference.org/markets/companies/x-fab), the German specialty foundry for auto and industrial chips, [reported third-quarter bookings up 38% at $224.7 million](https://theinference.org/article/x-fab-spent-1-billion-on-capacity-running-near-60-october-29-results-test-its-30-margin-promise), a two-year high, and its chief executive Damien Macq [said destocking had stopped weighing on orders](https://www.ideal-investisseur.fr/actions-b/x-fab-commandes-en-hausse-de-38-au-troisieme-trimestre-mais-une-perte-nette-de-28-m/28242.html), even as automotive revenue was still down 19% at $119.1 million [9]. X-FAB's bookings show the car-chip cycle is already turning, so Melexis growing 3% is no longer explained by the cycle [9]. *Chart: **Even after the cuts, every target sits above the share price** Bar chart of Melexis share price versus cut broker targets: price 56.10 euros, Deutsche Bank 65, consensus 71.23, Jefferies 78* *EUR price targets as cut on October 29, 2026; share price is the October 30 XETRA close; consensus is the 13-analyst average tracked by MarketScreener. [3][5][6]* ## What decides it Full-year results land on February 3, 2027 [1]. Melexis guided second-half sales of EUR 445 to 455 million [1], and [consensus wants EUR 949.5 million in 2027, 9% growth](https://uk.finance.yahoo.com/quote/MEX.DE/analysis/) [3]. Two numbers settle the argument between EUR 65 and EUR 78: whether China's record repeats this quarter, as the company says its orders point to [1], and whether Europe's 27% share stops falling. Thirteen analysts still average EUR 71.23 [5]. The 6.37% yield is the market's price for holding that question open until February [10]. ## Takeaway Melexis beat nothing: 4% sales growth and a 14% profit rise earned a 3.5% share-price fall and two target cuts, because NXP grew its car business 13% and Allegro 15%. The February 3 results settle it: whether China's record repeats and Europe's 27% share stops falling. ## Sources 1. [MarketScreener (Publicnow), Melexis N: Q3 2026 results, third quarter sales of 223.7 million EUR, 28 October 2026](https://www.marketscreener.com/news/melexis-n-q3-2026-results-a-third-quarter-sales-of-223-7-million-eur-ce785cd2d980fe20) 2. [Ideal Investisseur (EN), Melexis: Revenue up 4% in third quarter 2026, gross margin at 40.7%, 28 October 2026](https://www.ideal-investisseur.fr/en/stock-news/melexis-revenue-up-4-in-third-quarter-2026-gross-margin-at-40-7/28018.html) 3. [Yahoo Finance UK, Melexis NV (MEX.DE) analyst ratings, estimates and forecasts, collected 31 October 2026](https://uk.finance.yahoo.com/quote/MEX.DE/analysis/) 4. [La Libre, Melexis gagne 14% de benefice supplementaire et perd 3,5% en Bourse, 28 October 2026](https://www.lalibre.be/economie/placements/2026/10/28/melexis-gagne-14-de-benefice-supplementaire-et-perd-35-en-bourse-D4FUEHYXXVEIXOM3QOCILKBXL4/) 5. [MarketScreener NL (ABM Financial News), Deutsche Bank verlaagt koersdoel Melexis stevig, 29 October 2026](https://nl.marketscreener.com/beursnieuws/deutsche-bank-verlaagt-koersdoel-melexis-stevig-ce785cd3dc8eff21) 6. [De Aandeelhouder (ABM Financial News), Beursblik: Jefferies verlaagt koersdoel Melexis, 29 October 2026](https://www.deaandeelhouder.be/nieuws/2026/10/29/beursblik-jefferies-verlaagt-koersdoel-melexis-3/) 7. [TradingView (Reuters), Melexis CEO says China now beats Europe in new design wins, 28 October 2026](https://www.tradingview.com/news/reuters.com,2026:newsml_L5N46E1PP:0-melexis-ceo-says-china-now-beats-europe-in-new-design-wins/) 8. [Markets Insider (GlobeNewswire), NXP Semiconductors Reports Third Quarter 2026 Results, 27 October 2026](https://markets.businessinsider.com/news/stocks/nxp-semiconductors-reports-third-quarter-2026-results-1036672944) 9. [Ideal Investisseur (FR), X-FAB: commandes en hausse de 38% au troisieme trimestre, mais une perte nette de 2,8 M$, collected 31 October 2026](https://www.ideal-investisseur.fr/actions-b/x-fab-commandes-en-hausse-de-38-au-troisieme-trimestre-mais-une-perte-nette-de-28-m/28242.html) 10. [Yahoo Finance UK, Melexis NV (MEX.DE) valuation measures and financial statistics, collected 31 October 2026](https://uk.finance.yahoo.com/quote/MEX.DE/key-statistics/) --- Melexis grew 3% while NXP grew 13% and Allegro 15% in cars, and two banks cut its targets — The Inference. Canonical: https://theinference.org/article/melexis-grew-3-while-nxp-grew-13-and-allegro-15-in-cars-and-two-banks-cut-its-targets