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KeyBanc Expects Texas Instruments To Outperform, 'Well-positioned To Service Upside Demand'

KeyBanc Expects Texas Instruments To Outperform, 'Well-positioned To Service Upside Demand'

Given its higher internal capacity, Texas Instruments Incorporated (NASDAQ: TXN) is well-positioned to service near-term upside demand in a “supply constrained environment,” according to KeyBanc Capital Markets.

The Texas Instruments Analyst: John Vinh upgraded the rating for Texas Instruments to Overweight, while keeping the price target unchanged at $225.

The Texas Instruments Thesis: There are several aspects about the company’s business that seems underappreciated, Vinh said in the upgrade note.

The fact that 80% of Texas Instruments’ manufacturing capacity is internal should continue to drive “incremental design wins and share gains,” he noted.

“It’s the decision to not increase pricing and capacity is driving incremental share gains that should lead to outperformance over the next several years,” the analyst wrote.

Inputs from supply chain partners indicate that “much of the company’s demand creation in NA and Europe is generated through its web resource,” Vinh said.

“As such with a unique asset as and its direct consignment strategy, we believe this will allow TXN to sustain higher operating margins over time. Additionally, with its greater scale, and profitability, we believe TXN will also be able to sustain higher levels of R&D investments, which in turn should drive continued share gains,” he further wrote.

“Consolidated distribution strategy and direct customer visibility via its consignment strategy provides greater visibility and sets the stage for a softer cyclical landing as it lessens the risk of double ordering,” the analyst stated.

TXN Price Action: Shares of Texas Instruments are down 0.33% at $185.56 early Tuesday afternoon. 

(Photo: Texas Instruments)

Latest Ratings for TXN

Apr 2021JefferiesMaintainsBuy
Apr 2021MizuhoMaintainsNeutral
Apr 2021RosenblattMaintainsBuy

View More Analyst Ratings for TXN
View the Latest Analyst Ratings


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