Wells Fargo initiated coverage of Texas Instruments (NASDAQ:TXN) at Underweight with a $150 price target in a note Thursday, reflecting analysts' concerns.
The bank said it believes the company can't achieve its revenue targets and related utilization.
"Our UW rating reflects our view TXN shares already discount not only a full cyclical recovery, but also a bull-case scenario of $30B in FY26 revenue as well as full utilization of 300mm fab investments," analysts explain.
Furthermore, it is noted that the current TXN share price is already near a 52-week high and currently trades at more than 34 times near-term non-GAAP EPS.
Wells Fargo believes the shares seem to already reflect significant market share gains and prior-peak margins on lofty FY26 revenue targets.
"Our UW rating reflects a belief shares will be a relative underperformer compared to the peer group. We are not counting on a specific event to drive shares lower," says Wells Fargo. "However, the award of significant (>$3.0B) CHIPS Act grants could be a favorable catalyst for shares to the upside."