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Texas Instruments Inc TXN

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Business Conditions Are Holding Up Well for Texas Instruments; Raising FVE to $120 From $115

Brian Colello, CPA Sector Director

Analyst Note

| Brian Colello, CPA |

Texas Instruments reported relatively healthy second quarter results, consistent with the better-than-expected revenue updates provided by some of the firm’s peers in recent weeks. We’re also encouraged by TI’s outlook for the third quarter, as business conditions in most end markets (excluding automotive) have not significantly deteriorated due to the COVID-19 pandemic. Management continues to take a cautious tone toward future demand, as it is possible that the hearty sales levels stem from customers building up inventory in order to protect themselves in the event of future supply chain disruptions, rather than robust manufacturing activity. That said, TI did see a boost in end market demand from the medical end market, as well as tech sectors exposed to remote working trends. We are raising our fair value estimate for wide-moat TI to $120 from $115. However, shares still appear modestly overvalued to us.

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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.

12500 TI Boulevard
Dallas, TX, 75243
T +1 214 479-3773
Sector Technology
Industry Semiconductors
Most Recent Earnings Jun 30, 2020
Fiscal Year End Dec 31, 2020
Stock Type High Yield
Employees 29,768