Rosenblatt lowers Texas Instruments stock price target to $200 on fab closure

Investing.com - Rosenblatt has lowered its price target on Texas Instruments (NASDAQ:TXN) to $200.00 from its previous target while maintaining a Buy rating on the stock. The semiconductor giant, currently trading at $180.84, shows signs of being overvalued according to InvestingPro analysis, with a P/E ratio of 33.05x and strong gross margins of 58%.

The firm cited Texas Instruments’ recent inline quarterly performance, which included a charge related to the closure of older 6-inch fabrication facilities. The company’s outlook indicates a largely seasonal quarter ahead with revenue expected to decline approximately 7% sequentially. Despite these challenges, InvestingPro data shows the company maintains robust financial health with a current ratio of 5.81x, indicating strong liquidity.

Gross margin is anticipated to face pressure as Texas Instruments plans to reduce fab utilization to maintain flat to slightly lower inventory levels quarter over quarter. Rosenblatt has revised its 2026 estimates to reflect typical seasonal revenue trends and a more gradual year-over-year expansion in gross margin.

The firm noted that Texas Instruments’ data center-related revenue has grown approximately 50% year to date, though from a relatively modest base. Broader growth for the company remains constrained by slower recovery in both the Industrial and Automotive sectors.

Despite the price target reduction, Rosenblatt maintained its Buy rating on Texas Instruments stock, suggesting continued confidence in the company’s long-term prospects. The company has demonstrated remarkable dividend consistency, raising payments for 22 consecutive years. For deeper insights into TXN’s valuation and growth prospects, including 13 additional ProTips and comprehensive financial metrics, check out the full analysis on InvestingPro.

In other recent news, Texas Instruments has reported its third-quarter financial results, with revenue reaching $4.74 billion, closely aligning with consensus estimates of $4.66 billion. However, the company has guided December quarter revenue to $4.40 billion, indicating a 7% sequential decline and falling slightly below the consensus expectations of $4.50 billion. Following these announcements, several firms have adjusted their price targets for Texas Instruments. Mizuho reduced its price target to $145, citing margin pressure, while maintaining an Underperform rating. Bernstein lowered its target to $160, describing the third-quarter results as "decent" and keeping a Market Perform rating. Jefferies adjusted its target to $180, noting a delay in industry recovery, and maintained a Hold rating. Morgan Stanley, surprised by the lack of seasonal growth, reduced its target to $175 and retained an Underweight rating. Evercore ISI also lowered its target to $226, following earnings projections that fell below Street estimates. These developments reflect a cautious outlook from analysts regarding Texas Instruments’ future performance.

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