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Investing.com - Cantor Fitzgerald maintained its Neutral rating and $200.00 price target on Texas Instruments (NASDAQ:TXN) in a research note published Tuesday. The semiconductor giant, currently valued at $188.6 billion, trades at a P/E ratio of 38.9x, significantly above industry averages. According to InvestingPro analysis, the stock appears to be trading above its Fair Value.
The firm cited concerns about Texas Instruments’ gross margin expansion potential during the company’s current elevated investment phase. Cantor Fitzgerald noted that increased depreciation expenses will create headwinds for margin growth.
According to the research note, this depreciation dynamic will create nearly a 2-point gross margin headwind in 2025 and nearly a 4-point headwind in 2026 compared to 2024 margins. The firm emphasized that margin expansion is important for stock performance.
Cantor Fitzgerald highlighted that Texas Instruments has limited leverage relative to its peer group through the end of 2026, which will likely pressure the stock in the near term.
The firm pointed to a potential turning point in 2027, when both capital expenditures and depreciation are expected to decline, potentially making Texas Instruments "one of the most interesting gross margin expansion stories" at that time.
In other recent news, Texas Instruments announced a significant $60 billion investment across seven semiconductor manufacturing facilities in the United States. This move marks the largest investment in foundational semiconductor manufacturing in U.S. history and is expected to support over 60,000 jobs. The expansion includes facilities in Texas and Utah, with the first new fab in Sherman, Texas, set to begin production this year. In another development, Texas Instruments completed the sale of $1.2 billion in notes, issuing $550 million of 4.5% notes due in 2030 and $650 million of 5.1% notes due in 2035. This financial move is part of the company’s corporate financing activities. Analyst firm TD Cowen raised its price target for Texas Instruments to $200 while maintaining a Hold rating, reflecting a neutral outlook on the company’s near-term prospects. Meanwhile, Bernstein SocGen upgraded Texas Instruments’ stock rating to Market Perform, raising its price target to $180, noting that previous concerns about gross margin risks have played out. These recent developments highlight Texas Instruments’ strategic investments and financial activities in the semiconductor industry.
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