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Investing.com - TD Cowen has reduced its price target on Texas Instruments (NASDAQ:TXN) to $200 from $210 while maintaining a Buy rating on the semiconductor manufacturer’s stock. According to InvestingPro data, TXN currently trades at $166.71, with analyst targets ranging from $125 to $245. The stock’s valuation appears fair based on comprehensive Fair Value analysis.
The firm cited converging headwinds affecting Texas Instruments’ gross margins, including seasonality, depreciation, and underutilization now that the company has completed its inventory building phase. InvestingPro data shows the company maintains a healthy gross profit margin of 58.03%, though current trading multiples are elevated across various metrics.
TD Cowen noted that Texas Instruments’ fourth-quarter 2025 estimated gross margin of 55% appears concerning, with the approximately 250 basis point margin decline being steeper than anticipated before earnings, which contributed to the stock’s 8% drop after the market close.
Despite lowering earnings per share and free cash flow estimates, TD Cowen maintained its revenue outlook for the company, explaining that free cash flow should remain the focus and forms "the cornerstone to our long-term constructive view of the stock."
The firm acknowledged that while demand is "gradually improving," Texas Instruments faces near-term challenges from negative seasonality affecting factory loadings, with increased depreciation continuing to impact the model and amplify gross margin volatility at the cycle trough.
In other recent news, Texas Instruments has provided revenue guidance of $4.4 billion for the upcoming quarter, a figure that aligns with investor expectations but falls below the consensus estimate of $4.52 billion. This guidance has prompted several analyst firms to adjust their price targets for the company. UBS has reiterated its Buy rating with a price target of $245, noting the revenue guidance aligns with expectations despite concerns over gross margins. KeyBanc has lowered its price target to $220 while maintaining an Overweight rating, citing strong third-quarter results but reduced fourth-quarter expectations. Cantor Fitzgerald has cut its price target to $170, maintaining a Neutral rating due to gross margin pressures and softness in end-demand. Rosenblatt has decreased its price target to $200, maintaining a Buy rating, and highlighted a charge related to the closure of older fabrication facilities. Morgan Stanley has also lowered its target to $175, maintaining an Underweight rating, citing concerns over seasonal growth patterns. These recent developments reflect the company’s current financial outlook and the varied analyst perspectives on its future performance.
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