Texas Instruments stock price target lowered to $220 at KeyBanc

Investing.com - KeyBanc has lowered its price target on Texas Instruments (NASDAQ:TXN) to $220.00 from $240.00 while maintaining an Overweight rating on the semiconductor company. The stock, currently trading at $180.84, shows mixed signals according to InvestingPro data, with a strong dividend history of 55 consecutive years of payments and a current yield of 3.22%.

The firm cited Texas Instruments’ strong third-quarter results but noted the company guided fourth-quarter expectations lower, prompting the price target reduction.

According to KeyBanc, Texas Instruments is experiencing a gradual recovery in its Industrial segment and quarter-over-quarter growth in Automotive across all regions, though the overall cyclical recovery is occurring at a slower pace due to tariffs and macroeconomic uncertainty.

The firm highlighted that China continues to show strength for Texas Instruments, with sales growing 25% year-over-year in that region, despite broader recovery challenges.

KeyBanc remains optimistic about Texas Instruments’ long-term prospects, stating the company is well-positioned for the cyclical recovery given its capital expenditure investments to increase 300mm manufacturing capacity.

In other recent news, Texas Instruments reported third-quarter earnings that surpassed expectations, with revenue reaching $4.74 billion, aligning closely with the consensus estimate of $4.66 billion. However, the company provided fourth-quarter revenue guidance of $4.40 billion, which is below the consensus estimate of $4.52 billion, indicating a 7% sequential decline. The company attributed this to macroeconomic and geopolitical uncertainties, as well as a slower-than-typical recovery. Analysts have responded to these developments with various adjustments to their price targets. Cantor Fitzgerald lowered its target to $170 from $200, citing margin pressures and demand softness, while maintaining a Neutral rating. Rosenblatt adjusted its target to $200, maintaining a Buy rating, following a charge related to the closure of older fabrication facilities. Morgan Stanley reduced its target to $175, maintaining an Underweight rating, due to seasonal growth concerns. Jefferies lowered its target to $180, citing delayed recovery, while Mizuho cut its target to $145, referencing margin pressures.

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