On Friday, Stifel analysts reiterated their Hold rating on Texas Instruments stock (NASDAQ:TXN) with a steady price target of $200.00. The semiconductor giant, currently valued at $172 billion, trades at a P/E ratio of 35x, reflecting premium market positioning. According to InvestingPro data, the company maintains impressive dividend credentials, having raised its dividend for 21 consecutive years. The firm’s assessment came after Texas Instruments reported revenue of $4.00 billion, a 4.1% increase compared to Stifel’s estimate of $3.85 billion. This revenue beat was primarily driven by the Personal Electronics sector, which constituted 20% of the company’s 2024 revenues. However, the Industrial and Automotive sectors did not perform as well, aligning with Stifel’s earlier predictions.
The company’s revenue outlook for the first quarter of 2025 estimates a midpoint of $3.90 billion, a 2.7% sequential decline compared to Stifel’s forecast of a 2.0% decrease. Nonetheless, this figure is 1.3% higher than Stifel’s estimate and aligns with broader market expectations. Stifel also adjusted its forecast for Texas Instruments’ gross margins (GMs), now expecting 55.0%, a drop of 180 basis points from the initial estimate of 56.8%. This adjustment is attributed to lower utilization rates, with days of inventory (DOI) reaching a record high of 241 days, a less favorable product mix due to continued weakness in the industrial sector, and ongoing depreciation challenges stemming from elevated capital expenditures.
Despite near-term challenges, Stifel remains optimistic about the potential for recovery in the Industrial and Automotive sectors in the second half of the year, bolstered by improving global ISM/PMI indicators. Additionally, Texas Instruments’ high capital expenditure is anticipated to peak this year. The Hold rating is maintained due to the limited near-term catalysts and the company’s high valuation, which stands at 32.7 times the projected earnings for the calendar year 2026. The price target remains unchanged at $200, reflecting a price-to-earnings ratio of 32.6 times the estimated earnings for the same year. InvestingPro analysis suggests the stock is currently overvalued, with 14 additional exclusive insights available to subscribers. For comprehensive analysis including Fair Value estimates and detailed financial health scores, access the full Pro Research Report, part of InvestingPro’s coverage of 1,400+ top US stocks.
In other recent news, Texas Instruments, a semiconductor industry leader, has been the focus of numerous analyst reviews. The company’s Q1 2025 revenue midpoint outlook stands at $3.90 billion, a 2.7% quarter-over-quarter decrease, which is slightly above Stifel’s estimate of $3.85 billion. Despite near-term challenges, Stifel expects a recovery in the Industrial and Automotive sectors in the second half of 2025, supported by improving global ISM/PMI indicators. Stifel maintains a hold rating on Texas Instruments, with a price target of $200.
Truist Securities also maintains a hold rating on Texas Instruments, albeit with a reduced price target of $195, citing concerns in the semiconductor industry, particularly in the industrial and automotive markets. Similarly, Cantor Fitzgerald and Mizuho (NYSE:MFG) Securities maintain neutral ratings on the company with price targets of $200 and $190, respectively. Both firms highlight the challenges Texas Instruments faces in the automotive and industrial sectors.
On the other hand, Citi analyst Christopher Danely maintains a buy rating on Texas Instruments, albeit with a reduced price target of $284. Danely’s reassessment is based on the expectation that Texas Instruments is poised for a period of upward revisions over the next 4 to 6 quarters, beginning in April. These recent developments indicate a mixed outlook for Texas Instruments among different analyst firms.
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