On Thursday, Benchmark analyst Cody Acree revised the price target for Texas Instruments (NASDAQ:TXN) stock, lowering it to $200 from the previous $230, while maintaining a Buy rating. The adjustment follows Texas Instruments’ recent financial report for the March quarter and its subsequent forecast for the June quarter. The semiconductor giant, with a market capitalization of $147.4 billion, has seen its stock decline by over 18% year-to-date. InvestingPro data reveals the company has maintained dividend payments for 55 consecutive years, showcasing remarkable financial stability.
The company reported solid performance in the March quarter and provided an upbeat outlook for the June quarter. Texas Instruments, known as a leading supplier in the analog industry and a bellwether for major applications, indicated a broad cyclical industry recovery across all end markets and geographies. With annual revenue of $15.6 billion and a healthy gross profit margin of 58%, the company maintains strong fundamentals. The company also noted that it does not anticipate immediate impacts on its second-quarter business due to increased tariff volatility.
According to Acree, Texas Instruments’ positive outlook is expected to influence the broader chip industry’s sentiment during this earnings season. This sentiment is a blend of optimism about improved near-term cyclical business activity and caution due to the uncertain future effects of tariffs on customer and end market demand.
Despite the semiconductor industry currently experiencing a correction phase, the analyst believes that Texas Instruments’ strong cyclical signals and the absence of tariff-driven declines in customer orders should encourage investor interest in the chip sector. According to InvestingPro’s analysis, the company maintains a FAIR financial health score, with liquid assets exceeding short-term obligations. Acree suggests that the company’s financial results and forward-looking statements could serve as a catalyst for renewed investment across the semiconductor industry.
The price target reduction reflects a balance between the current market correction and the potential for Texas Instruments to lead a broader industry recovery. The company’s report and guidance are seen as key indicators for the chip sector’s performance in the near term. Based on InvestingPro’s Fair Value analysis, the stock appears fairly valued at current levels, with analyst price targets ranging from $125 to $250. Discover more insights and 12 additional ProTips about Texas Instruments through InvestingPro’s comprehensive research platform.
In other recent news, Texas Instruments reported first-quarter revenue that exceeded expectations, reaching $4.07 billion, a 4.3% increase over Stifel’s estimate. The company also provided a second-quarter revenue forecast with a midpoint of $4.35 billion, surpassing Stifel’s projection of $4.10 billion. Cantor Fitzgerald noted Texas Instruments’ robust financial performance, with revenue and earnings per share of $8.4 billion and $2.64, respectively, exceeding consensus estimates. Analysts from Stifel, TD Cowen, and Cantor Fitzgerald maintained a Hold or Neutral rating on the stock, with price targets ranging from $160 to $170, citing uncertainties such as tariffs and macroeconomic factors. Truist Securities also adjusted its price target to $171, maintaining a Hold rating while acknowledging the company’s positive trajectory despite tariff concerns. KeyBanc Capital Markets lowered its target to $215 but retained an Overweight rating, highlighting the company’s strong quarterly performance and flexibility in managing tariff-related challenges. Despite varying price targets, analysts generally recognized the company’s strong performance and potential for growth amid uncertain market conditions.
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