BofA’s Hartnett says concentrated U.S. stock returns are likely to persist
Investing.com - Goldman Sachs has initiated coverage on Texas Instruments (NASDAQ:TXN) with a Buy rating and a price target of $255.00, representing potential upside from the current price of $216.39. According to InvestingPro data, the stock is trading near its 52-week high of $220.38, with strong momentum over the past six months showing a 15.62% return.
The investment bank notes that Texas Instruments holds the position of largest analog company with 26% market share and ranks as the sixth-largest MCU provider globally with approximately 5% market share. With a market capitalization of $196.58 billion and impressive gross margins of 58%, the company demonstrates significant market strength. InvestingPro analysis reveals 15+ additional key insights about TXN’s market position and financial health, available in the comprehensive Pro Research Report.
Goldman Sachs highlights that the company’s business is heavily concentrated in the automotive and industrial sectors, which represent 35% and 34% of sales respectively.
The firm believes that Texas Instruments’ current below-trendline shipping levels in its analog and embedded businesses are not entirely attributable to market share loss or competition, but rather stem from a lack of orders and low customer buffer stocks.
As the cyclical recovery progresses, Goldman Sachs expects Texas Instruments’ free cash flow generation to outperform peers, despite projecting a more muted earnings recovery.
In other recent news, Texas Instruments announced a significant $60 billion investment to expand its semiconductor manufacturing facilities across the United States. This expansion is expected to support over 60,000 U.S. jobs and will bolster the company’s manufacturing capacity to meet rising demand for semiconductors in various applications. The investment includes the construction and ramp-up of seven large-scale fabs in Texas and Utah. Meanwhile, Truist Securities maintained its Hold rating and $171 price target on Texas Instruments, highlighting the company’s potential for revenue growth in the second half of 2025. Cantor Fitzgerald also maintained its Neutral rating with a $200 price target, expressing concerns about gross margin expansion due to increased depreciation expenses. TD Cowen raised its price target for Texas Instruments from $160 to $200, citing discussions with the company’s investor relations team about capital investment and competitive challenges. Additionally, KeyBanc Capital Markets adjusted price targets for various semiconductor companies, including raising Broadcom (NASDAQ:AVGO)’s target to $330 and Monolithic Power (NASDAQ:MPWR) Systems to $940.
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