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Investing.com - TD Cowen raised its price target on Texas Instruments (NASDAQ:TXN) to $200 from $160 on Wednesday, while maintaining a Hold rating on the semiconductor manufacturer’s stock. The stock, currently trading at $204.58 and near its 52-week high of $220.38, appears overvalued according to InvestingPro analysis.
The price target adjustment followed meetings between TD Cowen and Texas Instruments’ investor relations team, including Dave Pahl and Mike Pienovi, where several key topics were discussed.
The discussions centered around near-term cyclical dynamics in the semiconductor industry, capital investment and capacity outlook for the company, and competitive challenges in the Chinese market.
Texas Instruments’ strategy for regaining market share through its U.S. manufacturing footprint and technology investments was also a focal point of the meetings, according to TD Cowen.
Despite the significant 25% increase in price target, TD Cowen maintained its Hold rating on Texas Instruments stock, suggesting a neutral stance on the company’s near-term prospects.
In other recent news, Texas Instruments announced a significant investment of over $60 billion to expand its U.S. semiconductor manufacturing facilities. This investment will cover seven facilities across Texas and Utah, with the Sherman, Texas mega-site receiving up to $40 billion for four fabrication plants. The expansion is expected to support over 60,000 new jobs and represents the largest investment in foundational semiconductor manufacturing in U.S. history. Additionally, Texas Instruments has issued $1.2 billion in notes, consisting of $550 million of 4.5% notes due in 2030 and $650 million of 5.1% notes due in 2035, as part of its corporate financing activities.
In terms of stock ratings, Bernstein SocGen Group upgraded Texas Instruments from Underperform to Market Perform, citing reduced concerns over gross margin risks and expectations of increased free cash flow per share. Meanwhile, UBS analyst Timothy Arcuri lowered the price target for the company to $215 from $225 but maintained a Buy rating, suggesting cautious optimism about Texas Instruments gaining market share during a cyclical recovery. Arcuri also noted potential impacts from a US/China trade war, which could influence the company’s trajectory. These recent developments reflect Texas Instruments’ strategic investments and the varying perspectives of analysts on its financial outlook.
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