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Texas Instruments Incorporated (TXN), headquartered in Dallas, Texas, is a global semiconductor company that designs, manufactures, tests, and sells analog and embedded processing chips for industrial, automotive, personal electronics, communications equipment, and enterprise systems. Valued at $181.35 billion by market cap, TXN has manufacturing and design facilities, including wafer fabrication and assembly/test operations in North America, Asia, and Europe.
Shares of TXN, the world’s largest analog chipmaker, have underperformed the broader market over the past year. TXN has gained 19.2% over this time frame, while the broader S&P 500 Index ($SPX) has rallied nearly 28.9%. However, in 2024, TXN stock is up 16.9%, surpassing SPX’s 11.2% rise on a YTD basis.
Narrowing the focus, TXN’s underperformance looks more pronounced when compared to the VanEck Semiconductor ETF (SMH). The exchange-traded fund has gained about 88.9% over the past year. Also, the ETF’s 39.7% returns on a YTD basis easily outshine the stock’s gains over the same time frame.
TXN shares jumped 7% on Apr. 24 after reporting better-than-expected Q1 results on Apr. 23. Its revenue declined 16% year-over-year to $3.66 billion but beat the analyst estimates of $3.60 billion. The company’s EPS came in at $1.20, representing a decline of 35% year-over-year, but surpassed Wall Street estimates of $1.07. For Q2, TXN expects its revenue to come between $3.65 billion and $3.95 billion and EPS between $1.05 and $1.25.
For the current fiscal year, ending in December, analysts expect TXN to report an EPS decline of 26.4% to $5.17 on a diluted basis. The company’s earnings surprise history is mixed. It beat the consensus estimate in three of the last four quarters while missing the forecast on another occasion.
Among the 28 analysts covering TXN stock, the consensus rating is a “Hold.” That’s based on nine “Strong Buy” ratings, 15 “Holds,” one “Moderate Sell,” and three “Strong Sells.”
This configuration is less bullish than three months ago, when the consensus rating was Moderate Buy, with eight suggesting a “Strong Buy” and two suggesting a “Strong Sell.”
Recently, CJ Muse analyst Cantor Fitzgerald maintained a “Neutral” rating on TXN stock and raised the price target from $180 to $210, implying a potential upside of 5.4% from current levels.
The mean price target of $183.97 represents a 7.6% downside from TXN’s current price levels. The Street-high price target of $225 suggests an upside potential of 13%.
On the date of publication, Dipanjan Banchur did not have (either directly or indirectly) positions in any of the securities mentioned in this article. All information and data in this article is solely for informational purposes. For more information please view the Barchart Disclosure Policy here.
