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The Argus Research View on Texas Instruments

Joanna Kong
Yahoo Finance Premium
A Texas Instruments Office is shown in San Diego, California, U.S., April 24, 2018. REUTERS/Mike Blake
  • Texas Instruments (TXN) shares dipped 1% in a down market after posting annual declines in revenue and EPS for 4Q19 but beating consensus expectations for both. The company cheered semiconductor investors when it characterized its end markets as “stabilizing,” while not expressing undue optimism about the outlook.

  • We believe the current cyclical decline, which has not been unusually severe by historical standards, is closer to the end than beginning. While the mood at TXN has not swung to unbridled optimism, the company provided investors with a much more upbeat outlook for the current first quarter of 2020 across most end markets and product categories. The outlook began to brighten during 4Q19. As the quarter progressed, according to management, all end markets reduced their rates of annual decline substantially.

  • Given prospects for revenue and EPS acceleration in the coming year, our blended valuation is well above current prices, and we believe TXN continues to offer good value.

  • A relentless focus on shareholder return should keep both institutional and individual investors highly engaged with TXN. We are reiterating our BUY rating on TXN shares and our 12-month target price of $145.

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