4 Analysts On Texas Instruments' Q2 Print: 'Nearer Term, Results Were Better,' Q3 'Expected To Be Flat'

Shares of Texas Instruments Inc TXN tanked in early trading on Wednesday, after a steep decline in the previous session.

The company reported upbeat second-quarter results on auto chip sales, amid an exciting earnings season. Here are some key analyst takeaways from the earnings release.

Susquehanna On Texas Instruments

Analyst Christopher Rolland reiterated a Positive rating, while lifting the price target from $205 to $215.

“TI reported better 2Q results driven by stronger Automotive, Industrial and PE,” Rolland said in a note. He added, that the company’s “bottom-line guidance implies a disappointing gross margin, down more than -150 basis points sequentially.”

If Texas Instruments were to continue to “aggressively expand long-term capacity in light of near-term gross margin weakness and FCF headwinds,” the extra capacity could “ultimately incentivize the company to cut prices to fill the fabs, exacerbating GM headwinds further,” the analyst stated.

BMO Capital Markets On Texas Instruments

Analyst Ambrish Srivastava maintained an Outperform rating while keeping the price target unchanged at $215.

Texas Instruments does not plan to change its long-term capital allocation plans “to build for the future,” despite underperforming versus peers over the past few quarters, Srivastava said. “We note that another large jump in inventory dollars, is likely indicative of TI preparing for an upturn,” he added.

“Nearer term, results were better, revenue guidance on a q-q basis is lower,” the analyst stated.

Check out other analyst stock ratings.

Oppenheimer On Texas Instruments

Analyst Rick Schafer reiterated an Outperform rating and price target of $195.

Texas Instruments reported mixed results for its second quarter and its third-quarter outlook was in-line with expectations, Schafer said.

“Most end-markets (ex-Auto) remain sluggish,” the analyst wrote, adding that China was also “notably soft.” “We see TXN’s broad industrial exposure impacted by macro uncertainty, particularly in core industrial,” he further stated.

KeyBanc Capital Markets On Texas Instruments

Analyst John Vinh wrote in a note that Texas Instruments’ second-quarter results reflected “weakness across all end-market segments with the exception of auto and likely limited signs of a recovery in China.”

“3Q revenue is expected to be flat q/q, below consensus and normal seasonality of +6% q/q,” he added.

TXN Price Action: Shares of Texas Instruments had declined by 5.30% to $176.21 at the time of publishing Wednesday.

Photo: Texas Instruments

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