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Texas Instruments Inc TXN

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Morningstar’s Analysis

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PREMIUM

There’s No Freeze in Texas Instruments’ Revenue Growth; Raising FVE to $166, but Shares Overvalued

Brian Colello, CPA Sector Director

Analyst Note

| Brian Colello, CPA |

Texas Instruments reported strong first-quarter results and provided investors with decent second-quarter guidance that points toward robust semiconductor demand in a wide variety of end markets. Given its concentration in analog chips and in-house manufacturing, TI appears to be weathering the current bout of chip shortages better than others. While we’re skeptical that TI is gaining significant market share during the shortage, we’re also relatively more confident that the company won’t be leaving revenue on the table in the near term. We are raising our fair value estimate for wide-moat TI to $166 per share from $140 but still view shares as modestly overvalued.

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Company Profile

Business Description

Dallas-based Texas Instruments generates about 95% of its revenue from semiconductors and the remainder from its well-known calculators. Texas Instruments is the world's largest maker of analog chips, which are used to process real-world signals such as sound and power. Texas Instruments also has a leading market share position in digital signal processors, used in wireless communications, and microcontrollers used in a wide variety of electronics applications.

Contact
12500 TI Boulevard
Dallas, TX, 75243
T +1 214 479-3773
Sector Technology
Industry Semiconductors
Most Recent Earnings Mar 31, 2021
Fiscal Year End Dec 31, 2021
Stock Type Cyclical
Employees 30,000

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