Texas Instruments (TXN): does management change hiccup mean business as usual?

4:47 pm ET, 18 Jul 2018

Texas Instruments Incorporated (TXN) reports earnings on July 24 after market close.  The report will be for the fiscal quarter ending June 2018.  Shares are trading at 114.56, down -0.5%.

What are TI earnings expectations? What news will the market be watching out for?

The firm announced the resignation of CEO Brian Crutcher, who obtained the role only a month-and-a-half ago, citing violations of the company's code of conduct.  Former CEO and current Chairman Rich Templeton will return to the president and CEO roles on an ongoing, indefinite basis.  TI noted that Templeton's appointment is not temporary and that the board is not seeking an immediate replacement. 

TI announced second-quarter revenue of $4.02 billion and earnings per share of $1.40, both of which were modestly ahead of analysts' expectations. Revenue was at the high end of the firm's previous guidance of $3.78 billion-$4.10 billion. EPS exceeded the high end of the firm's range of $1.19-$1.39, although the firm noted that $0.03 of EPS came from a discrete tax benefit not incorporated into the firm's original guidance. 

Texas Instruments is the world's largest analog chipmaker and a key supplier of embedded chips into a host of applications. Texas Instruments' relentless focus on higher-margin analog and embedded chips is encouraging.  Given the smart operational moves on the manufacturing front,  it's quite possible the gross margin expansion in the years ahead.

Texas Instruments has a leading share of the fragmented yet lucrative analog chip market.  Analog chips are used to convert real-world signals, such as sound and temperature, into digital signals that can be processed.  Texas Instruments benefits from intangible assets around proprietary analog designs, as well as customer switching costs. 

Since analog chips are neither particularly expensive, nor do they require cutting-edge manufacturing techniques, high-quality analog chipmakers tend to retain design wins for the life of the product, yet maintain healthy pricing and strong profitability on such sales over time.  In addition, Texas Instruments' size allows the firm to compete across a broader spectrum of industries, without its fortunes tied to a single customer or end market.

Texas Instruments Inc. has a history of beating analysts’ earnings estimates.  In the past four quarters, the company: 

  • Beat analyst EPS estimates by 8 cents ($1.03 actuals vs. $.95 forecast) in FQ2’17;
  • Beat analyst EPS estimates by 12 cents ($1.24 actuals vs. $1.12 forecast) in FQ3’17;
  • Delivered on the analyst EPS estimate ($1.09 actuals vs. $1.09 forecast) in FQ4’17;
  • Beat analyst EPS estimates by 10 cents ($1.21 actuals vs. $1.11 forecast) in FQ1’18.

Over the last month, Texas Instruments Incorporated (TXN) returned -1.15%. 

Texas Instruments Incorporated (TXN) average analyst price target ($119.79) is 4.57% above its current price ($114.56).

For the latest price and information on Texas Instruments Incorporated, please visit Finstead and search for "TXN price" or "TXN news".

Intel and Apple: What's Next?

3:13 pm ET, 03 Apr 2018

Intel’s (NASDAQ:INTC) stock price witnessed a big decline yesterday after Bloomberg reported that Apple would not use Intel chips for its Mac computers. As a part of the multi-step transition, Intel processors will be replaced by native Apple components starting 2020.

Apple did not respond to the ‘news’ and Intel denied acknowledging this as well.  Apart from Intel, its rivals such as Qualcomm, Broadcom, and Arms supply Apple with chips and processors. These are used for various purposes such as artificial intelligence and augmented reality — in addition to in-house chips for Macs, Apple Watches, AirPods, and Beats.

If Apple opts for its own chips instead of other manufacturers’, it will eliminate the critical dependency on the new chip models. It could soon stand out from the competition as the only PC and electronics maker utilizing its own processors.

The Kalamata code is in its initial developmental stage. It is a part of the larger strategy that aims at enabling Apple devices (Macs, iPhones, and iPads) to work in a similar and coordinated way.

This step is a major setback for Intel. The partnership between the two companies has caused the revival of Apple’s Macs and it also helped Intel get to a leading position in the electronics marketplace.

Intel's ability to produce powerful processors compared to its competitors through the use of the latest manufacturing technology has cemented its #1 position on the market.

Will the INTC stock price recover?  Per Finstead research, Intel's average analyst price target is $52, which is close to its current price. The upside is very small.

Intel has a fairly low valuation compared to its peers and lags behind its rivals QCOMCHKPTXNAMD, and NVDA.

Investors should consider a couple of points to estimate the impact of Bloomberg’s claim on Intel’s business going forward:

  • Bloomberg indicated that Apple makes up only 5% of Intel’s total revenue 
  • Apple held 7.6% market share for PC units in the most recent quarter, based on Gartner research.

Perhaps you should wait and see at this critical juncture until things fully play out.  

Texas Instruments Incorporated (TXN) Stock Guide

Updated at: 6:10 pm ET, 18 Sep 2020

Before we start: if you're looking for TXN stock price, you can quickly find it out by visiting Finny and typing "TXN quote". If you're looking for a quick scoop on TXN stock (chart, price target, market cap, news and buy or sell analysis), go to Finny and look for "TXN". You'll get all this info in one place. Or you can just type "TXN news" to get the latest stock news.

Looking to buy or sell Texas Instruments Incorporated (TXN)? Interested in getting the full scoop on TXN, including earnings and dividends, stock forecast, buy or sell analysis and key stats? If so, you came to the right place.

In this TXN stock guide, we'll address key questions about TXN, above and beyond what you can find on Yahoo Finance, Zacks, MarketWatch or Morningstar.

Here is what you'll be able to find in this guide:

Earnings and Dividends: earnings, earnings date, dividend rate and dividend yield;
Analyst Predictions: stock forecast and analyst ratings;
Analysis: Finny Score and buy or sell analysis;
Key Stats: revenue, market cap, revenue growth, profit margin, P/E ratio, P/B ratio, industry, sector, and number of employees.

And here is the list of questions we'll answer:
1. What are TXN earnings?
2. What is TXN dividend?
3. What is TXN dividend yield?
4. What is TXN stock forecast (i.e., prediction)?
5. TXN buy or sell? What is TXN Finny Score?
6. What are the reasons to buy TXN? Why should I buy TXN stock?
7. What are the reasons to sell TXN? Why should I sell TXN stock?
8. What are TXN key stats: revenue, market cap, revenue growth, profit margin, P/E ratio, P/B ratio industry, sector, and number of employees?

So let's start. Scroll down to the question that interests you the most.

Earnings and Dividends

1. What are TXN earnings?

TXN trailing 12-month earnings per share (EPS) is $5.33.

2. What is TXN dividend?

TXN forward dividend is $3.60.

3. What is TXN dividend yield?

TXN forward dividend yield is 2.53%.

Analyst Predictions

4. What is TXN stock forecast (i.e., prediction)?

Based on TXN analyst price targets, TXN stock forecast is $139.68 (for a year from now). That means the average analyst price target for TXN stock is $139.68. The prediction is based on 32 analyst estimates.

The low price target for TXN is $85.00, while the high price target is $165.00.

TXN analyst rating is Buy.

Analysis

5. TXN buy or sell? What is TXN Finny Score?

#{finnyScore:30}Our quantitative analysis shows 3 reasons to buy and 7 reasons to sell TXN, resulting in Finny Score of 30.

6. What are the reasons to buy TXN? Why should I buy TXN stock?

Here are the reasons to buy TXN stock:

  • TI has a leading market share position in several chip segments, such as analog and digital signal processors.
  • A key element of TI's success has come from its massive global sales staff, which allows the firm to cross-sell its extensive semiconductor product portfolio to existing customers.
  • TI has made some shrewd moves to acquire manufacturing equipment at pennies on the dollar, thus leaving even more cash on hand that should ultimately be distributed to shareholders.
  • TXN forward dividend yield is 2.53%, higher than the industry (0.61%) and sector (0.26%) forward dividend yields. See TXN forward dividend chart.
  • TXN average analyst rating is Buy. See TXN analyst rating chart.
  • TXN cash to debt ratio is 0.73, higher than the average industry (0.33) and sector (0.17) cash to debt ratio. See TXN cash to debt chart.

7. What are the reasons to sell TXN? Why should I sell TXN stock?

Let's look at the reasons to sell TXN stock (i.e., the bear case):

  • TI faces intense competition from a host of well-capitalized competitors, such as Maxim Integrated in analog, Microchip in microcontrollers, and Broadcom in connectivity chips.
  • Despite its strong position and diverse exposure, TI is still vulnerable to the cyclicality of the overall semiconductor industry.
  • TI’s Other business segment, which includes DLPs, calculators and other products, has nice margins but may see declining revenue over the next few years.
  • TXN quarterly revenue growth was -11.70%, lower than the industry and sector average revenue growth (0.39% and 0.89%, respectively). See TXN revenue growth chart.
  • TXN profitability is declining. The YoY profit margin change was -2.51 percentage points. See TXN profitability chart.
  • TXN forward P/E ratio is 26.60, which is high compared to its industry peers’ P/E ratios. See TXN forward P/E ratio chart.
  • TXN Price/Book ratio is 17.36, which is high compared to its industry peers’ P/B ratios. See TXN forward Price/Book ratio chart.
  • TXN Price/Sales ratio is 9.70, which is high compared to its industry peers’ P/S ratios. See TXN forward Price/Sales ratio chart.
  • TXN short interest (days to cover the shorts) ratio is 3.56. The stock garners more short interest than the average industry, sector or S&P 500 stock. See TXN short interest ratio chart.
  • TXN Enterprise Value/Revenue multiple is 9.65, which is high compared to its industry peers’ Enterprise Value/Revenue multiples. See TXN Enterprise Value/Revenue chart.

Key Stats

8. What are TXN key stats : revenue, market cap, revenue growth, profit margin, P/E ratio, P/B ratio industry, sector, and number of employees?

Let's look at the key statistics for TXN:

Metrics TXN
Price $136.66
Average Price Target / Upside $139.68 / 2.21%
Average Analyst Rating Buy
Forward Dividend Yield 2.53%
Industry Semiconductors
Sector Technology
Number of Employees 29,888
Market Cap $132.78B
Forward P/E Ratio 26.60
Price/Book Ratio 9.7
Revenue (TTM) $13.69B
YoY Quarterly Revenue Growth -11.70%
Profit Margin 36.88%

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