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Investing.com - TD Cowen has reduced its price target on Texas Instruments (NASDAQ:TXN) to $230.00 from $245.00 while maintaining a Buy rating on the stock. The semiconductor giant, currently valued at $172.25 billion, trades at a P/E ratio of 35.48x, suggesting a premium valuation according to InvestingPro metrics.
The semiconductor company’s shares dropped more than 10% after hours following quarterly results and guidance that failed to meet elevated investor expectations. TD Cowen noted that the steep market rally since April had created unrealistic expectations amid ongoing challenges from tariffs and pull-ins. Despite market volatility, Texas Instruments maintains strong fundamentals with a healthy current ratio of 5.26x and has raised its dividend for 21 consecutive years, as highlighted in InvestingPro’s analysis.
Despite the price target reduction, the research firm expressed confidence in its earlier upgrade thesis, describing the sharp stock decline as "an overreaction, amplified by crowding ahead of the print." The analyst emphasized that Texas Instruments’ fundamentals are improving with abating inventory digestion.
TD Cowen highlighted that Texas Instruments made no changes to its capital plans and continues to show improving free cash flow. The firm maintains its view that Texas Instruments will outperform its peer group during what it describes as a "bumpy period."
The research firm’s long-term investment thesis remains intact, focusing on Texas Instruments’ "inflecting 2026 FCF and long-term share gain potential" rather than quarterly performance. For deeper insights into TXN’s long-term potential, InvestingPro subscribers can access comprehensive valuation models, 13 additional ProTips, and detailed financial health scores that help evaluate the company’s future prospects.
In other recent news, Texas Instruments reported second-quarter revenue of $4.448 billion, surpassing analysts’ expectations of $4.358 billion. Earnings per share also exceeded projections, coming in at $1.41 compared to the anticipated $1.35. The company noted a continued recovery across most end markets during the quarter. However, Texas Instruments indicated that revenue growth is expected to decelerate to 4% quarter-over-quarter in the third quarter. Following these results, KeyBanc maintained its Overweight rating with a $240 price target, while Bernstein reiterated a Market Perform rating with a $180 price target. Benchmark raised its price target to $220 from $200, maintaining a Buy rating, citing the solid performance in the June quarter. Truist Securities increased its price target to $196, maintaining a Hold rating despite concerns over the impact of tariffs on the business outlook. Stifel also reiterated a Hold rating with a $192 price target, highlighting strong industrial and personal electronics growth. These developments reflect varied analyst perspectives on Texas Instruments’ financial performance and future outlook.
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