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Texas Instruments Inc TXN

Morningstar Rating
$171.05 +3.72 (2.22%)
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Company Report

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.

Price vs Fair Value

TXN is trading at a 17% premium.
Price
$171.05
Fair Value
$315.00
Uncertainty
Medium
1-Star Price
$784.10
5-Star Price
$131.30
Economic Moat
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Capital Allocation
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Bulls Say, Bears Say

Bulls

Texas Instruments has a leading market share position in the lucrative analog semiconductor market, holding scale advantages that virtually no other rival can match.

Bears

If U.S.-China trade tensions continue, customers in China may gravitate to analog and embedded parts made by TI’s neutral European-based rivals, such as STMicro, Infineon, or NXP.

Is it the right time to buy, sell, or hold?
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News

Trading Information

Previous Close Price
$167.33
Day Range
$167.32172.09
52-Week Range
$139.48188.12
Bid/Ask
$170.05 / $171.25
Market Cap
$155.53 Bil
Volume/Avg
5.2 Mil / 5.3 Mil

Key Statistics

Price/Earnings (Normalized)
24.45
Price/Sales
8.94
Dividend Yield (Trailing)
2.97%
Dividend Yield (Forward)
3.04%
Total Yield
2.99%

Company Profile

Dallas-based Texas Instruments generates over 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 processors and microcontrollers used in a wide variety of electronics applications.
Sector
Technology
Industry
Semiconductors
Stock Style Box
Large Core
Total Number of Employees
34,000

Competitors

Valuation

Metric
TXN
NXPI
MCHP
Price/Earnings (Normalized)
24.4518.3514.54
Price/Book Value
9.207.666.64
Price/Sales
8.945.075.60
Price/Cash Flow
20.8416.4713.54
Price/Earnings
TXN
NXPI
MCHP

Financial Strength

Metric
TXN
NXPI
MCHP
Quick Ratio
3.271.200.58
Current Ratio
4.551.911.03
Interest Coverage
22.018.2318.47
Quick Ratio
TXN
NXPI
MCHP

Profitability

Metric
TXN
NXPI
MCHP
Return on Assets (Normalized)
22.56%15.37%21.82%
Return on Equity (Normalized)
43.06%44.97%54.48%
Return on Invested Capital (Normalized)
27.08%19.74%28.31%
Return on Assets
TXN
NXPI
MCHP
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