UPDATE: FBR Downgrades Texas Instruments to Underperform, Lowers PT

In a report published Monday, FBR & Co. downgraded its rating on Texas Instruments TXN from Market Perform to Underperform, and lowered its price target from $30.00 to $24.50. FBR noted, “While TI is a tremendous company with great analog products and scale, we have several concerns that lead us to think that TXN shares could underperform versus other semiconductor stocks that trade close to trough valuations: (1) TI's wireless businesses are challenged with connectivity traction limited and application processor prospects not tremendous as Apple and Samsung use internal processors; (2) TI did pursue a die bank inventory build-ahead in 1Q12 that could reduce utilizations and gross margins in 2H12 (and potentially beyond); (3) we are somewhat concerned TI has too much capacity following its National acquisition as the firm had a $110 million under-absorption period expense charge in 1Q12 despite the aforementioned inventory build-ahead, with more period expense charges likely in 2Q12 and possibly beyond; and (4) our 2013 EPS estimate is well below the Street, with downside risk to consensus estimates.” Texas Instruments closed on Friday at $27.02.