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Investing.com - Bernstein SocGen Group has reduced its price target for Texas Instruments (NASDAQ:TXN) to $160.00 from $180.00 while maintaining a Market Perform rating. The semiconductor giant, currently valued at $157.6 billion, trades at a P/E ratio of 31x, which aligns with InvestingPro’s analysis suggesting the stock is slightly overvalued.
The firm cited a disappointing pace of recovery for the semiconductor company, despite acknowledging that a recovery is underway. While Bernstein noted management credibility challenges, InvestingPro data shows the company maintains strong fundamentals with a FAIR financial health score and an impressive 22-year streak of dividend increases. Get access to 10+ additional exclusive ProTips and comprehensive analysis through InvestingPro’s detailed research reports.
Bernstein believes current Street estimates for Texas Instruments, which project earnings per share in the mid-$6 range for next year, are too optimistic. The firm’s own model forecasts earnings in the mid to high $5 range.
The analyst firm expressed concern that Texas Instruments will likely fall short of its 2026 scenario targets for both revenue and margins. This outlook could potentially lead to multiple compression in the stock’s valuation.
Bernstein’s new price target represents a reduction in the stock’s valuation multiple from 30x to 26x based on average fiscal year 2026/2027 earnings per share estimates. The firm maintains its lukewarm stance on both Texas Instruments specifically and the analog semiconductor space more broadly.
In other recent news, Texas Instruments reported its September quarter revenue exceeded expectations by $100 million, despite a slight earnings miss attributed to restructuring charges. However, the company issued weaker-than-expected guidance for the fourth quarter, marking the second consecutive quarter of such forecasts. Analysts have responded with mixed ratings and adjustments to price targets. Baird lowered its price target to $195 while maintaining an Outperform rating, citing a slow recovery and a poor gross margin outlook. Truist Securities reduced its price target to $175 and maintained a Hold rating, noting mixed third-quarter results and declining gross profit margins. TD Cowen adjusted its price target to $200 with a Buy rating, pointing to factors affecting gross margins such as seasonality and underutilization. Meanwhile, UBS reiterated its Buy rating with a $245 price target, acknowledging that the revenue guidance aligned with expectations but highlighted concerns over weak implied gross margins. These developments reflect ongoing challenges and analyst perspectives on Texas Instruments’ financial outlook.
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