The fourth quarter came in just slightly better than forecast. TI expected sales to repeat their decline across all its major markets, except again for its Automotive business.
The analyst believes TI's product, customer, and end market exposure positions the company to weather the current cyclical correction better than most.
Also contributing to TI's softer December results and March period outlook is the ongoing inventory correction.
BMO Capital analyst Ambrish Srivastava maintained an Outperform and raised the price target from $195 to $215.
Top-line guidance was lower than the consensus but higher than the analyst's expectations. EPS guidance beat the analyst's estimates.
The business behaves as it should, while the Automotive segment stands out. But it is a matter of time before that weakens as well.
Early benefit from the CHIPS Act (ITC part) is beginning to accrue.
The analyst boosted estimates, as OpEx control is far better.
KeyBanc analyst John Vinh maintained an Overweight and $210 price target.
TXN posted in-line 4Q22 results and guided 1Q23 lower. TXN indicated weakness across all segments except auto and will likely grow again in 1Q.
Management noted that order cancelations did increase in 4Q as customers looked to destock excess inventory.
The analyst views these results as being essentially in line with expectations, while guidance was "better than feared," given concerns of a weakening China economy.
Credit Suisse analyst Chris Caso maintained a Neutral with a $205 price target.
TXN reported essentially in line, with revenue and EPS guidance below expectations consistent with the company's practice.
Margins are under some pressure as depreciation from capital spending kicks in.
Caso expects slower revenue and higher depreciation to yield a 400bps gross margin headwind in CY23.
While CHIPS Act subsidies will help, the analyst also believes TXN is signaling capex above their $3.5 billion annual baseline due to their long-term confidence in market growth.
The combination of an elevated valuation and potential incremental margin headwinds keep the analyst on the sideline, pending further detail.
Price Action: TXN shares traded lower by 1.11% at $175.09 on the last check Wednesday.
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