Solid Performance Outpaces Broader Market in 2023
Based in Dallas, Texas, Texas Instruments Incorporated (TXN) is a prominent semiconductor firm boasting a market cap of $201 billion. The company excels in designing and manufacturing a wide array of analog and embedded processing chips, vital for powering various electronic devices across industries such as automotive, industrial, and consumer electronics.
Over the past year, Texas Instruments has significantly outperformed the broader market. TXN shares have risen by 46.7%, while the S&P 500 Index ($SPX) has achieved a return of nearly 35.9%. In 2024, TXN stock has increased by 26.6%, in contrast to the SPX’s gain of 25.8% year-to-date (YTD).
Comparing Performance with the Semiconductor Sector
However, Texas Instruments’ growth has been slower than that of the VanEck Semiconductor ETF (SMH), which has seen a YTD rise of about 45%.
The impressive performance of Texas Instruments can be attributed to a strong demand for its semiconductor products, especially within the automotive and industrial markets. On Nov. 6, TXN stock climbed over 4% in line with a broader rally in chip stocks.
Moreover, following the company’s report of its Q3 results on Oct. 22, TXN shares rose an additional 4% in the next trading session. Texas Instruments reported earnings per share (EPS) of $1.47, exceeding consensus estimates of $1.36. Additionally, its revenue reached $4.15 billion, surpassing Wall Street forecasts of $4.11 billion.
Future Earnings Expectations and Analyst Ratings
Looking ahead, analysts project a 27.6% decline in EPS to $5.08 on a diluted basis for the current fiscal year ending in December. Texas Instruments has a strong earnings surprise history, having beaten consensus estimates in each of the last four quarters.
Among the 28 analysts covering TXN stock, the overall consensus rating is a “Moderate Buy,” which reflects a mix of recommendations: 10 “Strong Buy,” 15 “Holds,” one “Moderate Sell,” and two “Strong Sells.”
This positive outlook marks a shift from three months ago when the consensus rating hovered around “Hold.”
On Oct. 23, Truist adjusted its price target for Texas Instruments, lowering it from $198 to $190 but maintaining a ‘Hold’ rating on the stock. While Texas Instruments currently trades above the mean price target of $212.40, the highest target of $298 suggests a potential increase of 38%.
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On the date of publication, Rashmi Kumari did not have (either directly or indirectly) positions in any of the securities mentioned in this article. All information and data in this article are solely for informational purposes. For more information, please view the Barchart Disclosure Policy here.
The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.
