In a report released today, Tristan Gerra from Robert W. Baird reiterated a Hold rating on Texas Instruments (TXN – Research Report), with a price target of $125.00.
Geoff Meacham has given his Hold rating due to a combination of factors pertaining to the current climate in the analog semiconductor space and specific financial indicators from Texas Instruments. The analog downcycle, marked by normalizing lead times and emerging pricing pressures, suggests the market is experiencing a phase where supply and demand dynamics are shifting unfavorably. Furthermore, Texas Instruments is grappling with an increase in inventory days and ongoing elevated cancellation rates, which, combined with a seasonally weak first half and potential macroeconomic headwinds, could exacerbate the situation.
The projection that revenue growth will not resume until the second half of 2025, with earnings per share potentially recovering earlier in the first quarter, drives the cautious stance. This timeline reflects an anticipated reduction in capital expenditures. Despite Texas Instruments’ favorable position for the next cyclical recovery due to its direct sales model, lack of long-term supply agreement exposure, and 300mm manufacturing capabilities, the near-term outlook remains clouded by lower margins and cyclical challenges, particularly in the Industrial segment. The company’s most recent quarter earnings and guidance falling below expectations further supports the rationale behind the Hold rating, indicating it may be premature for investors to re-engage with the stock.
According to TipRanks, Gerra is a 5-star analyst with an average return of 9.1% and a 54.26% success rate. Gerra covers the Technology sector, focusing on stocks such as Diodes, Advanced Micro Devices, and Broadcom.
In another report released yesterday, Barclays also reiterated a Hold rating on the stock with a $150.00 price target.
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Texas Instruments (TXN) Company Description:
Incorporated in 1930, Texas Instruments Incorporated, a global semiconductor company, designs, manufactures and sells analog and embedded processing chips. The company operates through two segments, including Analog, and Embedded Processing. The company is headquartered in Dallas, Texas.
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