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Investing.com - KeyBanc has reiterated its Overweight rating and $240.00 price target on Texas Instruments (NASDAQ:TXN), a prominent player in the semiconductor industry with a market cap of $170 billion, following the company’s second-quarter results and third-quarter guidance. According to InvestingPro data, the stock is currently trading near its Fair Value, with a P/E ratio of 35.4x.
Texas Instruments reported strong second-quarter results with revenue growth of 9% quarter-over-quarter, but indicated that growth would decelerate to 4% quarter-over-quarter in the third quarter. The company maintains strong fundamentals, with InvestingPro analysis showing a healthy gross profit margin of 58% and robust liquidity with a current ratio of 5.26.
The company attributed the strong second-quarter performance partly to tariff-related pull-ins, with industrial sector revenue growing almost 20% year-over-year and China specifically growing 19% quarter-over-quarter and 32% year-over-year.
Texas Instruments noted that the broader recovery in the automotive sector remains shallow and continues to lag, with China’s automotive market slowing in the second quarter, growing just 2% quarter-over-quarter and mid-single digits year-over-year.
Despite these mixed signals, KeyBanc highlighted that Texas Instruments continues to see a broader cyclical recovery with four out of five end markets growing, leading the firm to maintain its Overweight rating while slightly lowering estimates to account for the pull-in impacts. InvestingPro data reveals the company’s strong dividend track record, having raised dividends for 21 consecutive years, with 12 more exclusive insights available to subscribers.
In other recent news, Texas Instruments reported second-quarter revenue of $4.448 billion and earnings per share of $1.41, surpassing analyst expectations of $4.358 billion and $1.35 per share. This performance was driven by broad-based industrial strength and seasonal improvements in personal electronics, with most end markets showing recovery. Despite the strong results, Cantor Fitzgerald noted a more cautious tone from management compared to previous projections, maintaining a Neutral rating with a $200 price target.
Benchmark raised its price target for Texas Instruments to $220, maintaining a Buy rating, following the company’s solid performance in the June quarter. However, the company provided somewhat lighter than expected earnings guidance for September. Stifel reiterated a Hold rating with a $192 price target, acknowledging the company’s revenue growth and improved performance in various segments.
Rosenblatt Securities maintained a Buy rating and set a $245 price target, highlighting the company’s modest third-quarter guidance increase, though noting that the automotive sector was an exception to the overall growth. Meanwhile, Bernstein SocGen Group reiterated a Market Perform rating with a $180 price target, emphasizing the continued recovery across most end markets. These developments reflect a mix of optimism and caution among analysts regarding Texas Instruments’ future performance.
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