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On Wednesday, Texas Instruments (NASDAQ:TXN) received an upgraded stock rating from Citi, moving from Neutral to Buy. The firm also increased its price target for the semiconductor company to $235 from the prior $200.
This adjustment comes after Texas Instruments hosted a capital management call on Tuesday, during which it was revealed that the company has reduced its 2026 capital expenditure (CAPEX) forecast to a range of $2.0 billion to $5.0 billion, down from the previously stated $5.0 billion.
Citi's analyst noted that Texas Instruments' gross margins appear to be reaching a low point, aligning with their projections. The firm's optimism is based on the expectation that margins will recover to their former peak levels, potentially leading to a doubling in earnings per share (EPS). The forecasted margin improvement and subsequent EPS growth have prompted the firm to raise its estimates for Texas Instruments.
Texas Instruments, a major player in the semiconductor industry, has been navigating a dynamic market environment, with capital expenditure being a critical aspect of its strategic planning. The indication that gross margins may have reached their lowest point suggests a potential turnaround in profitability for the company.
Citi's new price target of $235 reflects a significant increase in confidence in the stock's performance. The upgraded rating and revised target suggest that the firm sees a more favorable outlook for Texas Instruments, considering recent developments and the company's financial strategies.
Investors and market watchers often look to rating changes and price target adjustments as indicators of a stock's potential future movement. Citi's upgrade to a Buy rating and increased price target for Texas Instruments are likely to be closely monitored by stakeholders in the semiconductor sector.
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