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Investing.com - Truist Securities has lowered its price target on Texas Instruments (NASDAQ:TXN) to $175.00 from $196.00 while maintaining a Hold rating on the semiconductor company. According to InvestingPro data, the stock currently trades at a P/E ratio of 33.05x, suggesting a premium valuation relative to peers.
The firm cited Texas Instruments’ mixed third-quarter results and fourth-quarter guidance that fell below consensus expectations as factors in the decision. Truist also noted that gross profit margins are declining for the company, though InvestingPro data shows the company maintains a healthy gross profit margin of 58.03%. InvestingPro subscribers can access 13 additional key insights about TXN’s financial health and valuation metrics.
According to Truist, Texas Instruments’ fundamental cycle is stabilizing rather than recovering because inventory levels have normalized, and neither direct nor channel customers are restocking. This has resulted in year-over-year revenue growth fading in Q3 and expected to fade further in Q4.
Truist Securities reduced its calendar year 2026 earnings per share estimate for Texas Instruments to $5.66 from $6.12. The new price target of $175 is based on a 31x multiple, which represents a stable 9x premium to the S&P.
The firm indicated that its analysis of Texas Instruments aligns with feedback from industry contacts, leading to its preference for data center and AI semiconductor companies over diversified semiconductor firms like Texas Instruments.
In other recent news, Texas Instruments has been in the spotlight with several updates impacting investor perspectives. The company reported third-quarter results that exceeded expectations, yet it provided fourth-quarter revenue guidance of $4.4 billion, which fell short of the consensus estimate of $4.52 billion. Analysts have responded to these developments with varied assessments. UBS maintained its Buy rating and a $245 price target, noting that the revenue guidance was in line with expectations despite concerns over weak gross margins. In contrast, Cantor Fitzgerald lowered its price target from $200 to $170, citing pressures on gross margins and continued softness in end-demand.
KeyBanc also reduced its price target to $220 from $240, referencing Texas Instruments’ strong third-quarter results but noting the lowered fourth-quarter expectations. TD Cowen adjusted its price target to $200, maintaining a Buy rating, and highlighted issues such as seasonality and underutilization affecting gross margins. Additionally, Rosenblatt decreased its price target to $200, pointing to a charge related to the closure of older fabrication facilities and a projected 7% sequential decline in revenue. These recent developments reflect a mix of confidence and caution among analysts regarding Texas Instruments’ future performance.
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