KeyBanc cuts Texas Instruments stock target to $215

Published 24/04/2025, 14:12
© Reuters.

On Thursday, KeyBanc Capital Markets adjusted its price target on Texas Instruments stock (NASDAQ:TXN), currently trading at $152.15 with a market capitalization of $138.4 billion, reducing it to $215 from the previous $250, while retaining an Overweight rating. The decision followed Texas Instruments’ announcement of first-quarter results and second-quarter guidance that surpassed market expectations. The company’s performance was attributed to the end of a downcycle and a broad recovery in the industrial sector, alongside low customer inventories across all end markets. According to InvestingPro data, TXN maintains strong financial metrics with a gross profit margin of 58.1%.

Texas Instruments has recognized the current trend of customers accumulating inventory due to the uncertainty surrounding tariffs, although the company has not observed any adverse effects yet. Despite the tariff ambiguity, Texas Instruments, which has about 20% exposure to China tariffs, has demonstrated flexibility by having the capability to shift production to its four 200mm fabrication plants located outside the United States, including two in Japan, one in China, and one in Germany. InvestingPro analysis shows the company operates with a moderate level of debt and maintains a healthy current ratio of 4.12, indicating strong liquidity to manage operational challenges.

KeyBanc analyst cited the strong quarterly performance as a positive sign, but also noted the need to adjust estimates based on the contraction in market multiples, which led to the lowered price target. The report from KeyBanc reflects a continued bullish stance on Texas Instruments, with the Overweight rating suggesting that the firm expects the stock to outperform the average return of the stocks that KeyBanc covers over the next 12 to 18 months. Notably, InvestingPro data reveals that TXN has raised its dividend for 21 consecutive years, currently yielding 3.58%, demonstrating consistent shareholder returns despite market fluctuations.

Texas Instruments’ recent financial results indicate a positive outlook for the company, with the firm’s ability to navigate tariff-related challenges and maintain flexibility in its manufacturing operations. The revised price target from KeyBanc takes into account broader market conditions while acknowledging the company’s strong performance and potential for growth.

Investors will likely watch Texas Instruments closely as it continues to manage the balance between tariff-related inventory adjustments and its global manufacturing capabilities. The company’s strategic positioning with fabrication facilities across various countries could be a key factor in mitigating the risks associated with geopolitical uncertainties.

In other recent news, Texas Instruments reported strong financial results for the first quarter of 2025, with earnings per share (EPS) of $1.28, surpassing the forecast of $1.06. The company’s revenue reached $4.1 billion, exceeding expectations of $3.91 billion and reflecting an 11% year-over-year growth. This growth was driven by a 13% rise in analog revenue and a 23% increase in other segments. Looking ahead, Texas Instruments provided positive guidance for the second quarter, projecting revenue between $4.17 billion and $4.53 billion, with EPS expected to range from $1.21 to $1.47. Analysts at JPMorgan maintained an Overweight rating on the company’s stock but lowered the price target from $230 to $195, citing concerns over potential tariff impacts and a weaker macro demand environment in the latter half of the year. JPMorgan noted the company’s strong performance in the March quarter, with better-than-expected revenue and margins, but highlighted caution due to anticipated trade-related challenges. Texas Instruments remains confident in its ability to navigate these challenges, emphasizing its flexible manufacturing capabilities and commitment to long-term growth.

This article was generated with the support of AI and reviewed by an editor. For more information see our T&C.

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