Texas Instruments Earnings: Lowering Our Valuation to $146 from $155 Amid Gross Margin Weakness

Wide-moat Texas Instruments reported predictably soft fourth-quarter results, but provided investors with a gloomy forecast for the March quarter that implies a sizable dip in gross margin and an ongoing slowdown in orders from industrial customers and headwinds in the automotive end market. We trimmed our fair value estimate to $146 from $155, as we’re making lower long-term revenue and gross margin assumptions, and shares appear a bit overvalued to us.