Texas Instruments Inc. (NASDAQ: TXN) is scheduled to release its fourth-quarter financial results after the markets close on Wednesday. The consensus estimates are calling for $1.02 in earnings per share (EPS) and $3.22 billion in revenue. In the same period of last year, the Dallas-based semiconductor maker said had $1.27 in EPS and $3.72 billion in revenue.
The stock was crushed after posting solid third-quarter results, with guidance being what really brought down the stock. Following that report, Jefferies weighed in on the company and its fourth-quarter outlook:
We believe Texas Instruments lowering its fourth quarter outlook is more of a catch-up to peers than a foreshadowing of negative cuts for the group. As the company runs 2/3 of its revs through its consignment inventory program vs. 10-20% for its peer group, it makes sense to us that the company would report downward revisions to estimates later than its peer group this inventory cycle. We argue that a proactive inventory destock should impact semis with traditional distribution models before it impacts semis with consignment inventory models. As such, we believe the pullback in shares post-earnings last week presents a compelling buying opportunity.
Jefferies has a Buy rating with a $150 price target, outpacing most other analysts, who seem to be on the sideline.
Excluding Wednesday’s move, Texas Instruments has outperformed the broad markets with the stock up about 32% in the past 52 weeks. However, in just the past quarter alone, the stock is only up 1%.
A few analysts weighed in on Texas Instruments ahead of the report:
- Morgan Stanley has an Equal Weight rating with a $119 price target.
- UBS Group has a Sell rating with a $110 target price.
- Deutsche Bank has a Hold rating and a $115 price target.
- Goldman Sachs rates it as Neutral rating a $111 price target.
- RBC has a Sector Perform rating and a $124 price target.
- Mizuho’s Neutral rating comes with a $113 target price.
Shares of Texas Instruments were last seen up about 2% at $133.25, in a 52-week range of $94.81 to $133.33. The consensus price target is $129.00.