Stock Analysis | Texas Instruments Outlook - Mixed Signals Amid Analyst Disagreement and Weak Technicals

Market Snapshot

Takeaway: Texas Instruments (TXN) has seen a 4.19% price increase recently, but technical indicators point to a weak trend and bearish signals, suggesting caution for investors.

News Highlights

• McKinsey on Tariffs and Chip Supply Chains: New research highlights how U.S. tariffs may impact semiconductor supply chains, potentially affecting companies like Texas Instruments. The uncertainty in trade policy remains a risk for the sector.
• Japan-U.S. Cooperation on Rare Earths and Semiconductors: Japan is pushing for closer cooperation with the U.S. on rare earth materials and semiconductor manufacturing, aiming to reduce dependency on China and counter trade imbalances. This could open new opportunities for global chipmakers.
• Investors Eye AI Semiconductor Startups in India: Former executives from Intel and AMD are launching AI chip startups in India, a move driven by government incentives and growing demand. While these ventures may not directly impact TXN, they signal an expanding competitive landscape in the semiconductor space.

Analyst Views & Fundamentals

Average Rating Score (Simple Mean): 4.00
Weighted Rating Score (Performance-Weighted): 2.79
Rating Consistency: Analysts show significant dispersion, with 7 “Neutral”, 7 “Strong Buy”, and 4 “Buy” ratings over the past 20 days. This lack of consensus makes it difficult to draw a clear market direction.

The weighted score is notably lower than the simple average, indicating that recent analyst predictions have underperformed. This mismatch with the current 4.19% price rise suggests market expectations may not be fully aligned with the stock’s short-term momentum.

Key Fundamental Factors and Scores:

• Gross Profit Margin (GPM): 57.89% (internal diagnostic score: 3.00) – A strong margin but below the top quartile.
• Net Cash Flow from Operating Activities per Share (YoY Growth Rate): 5.14% (score: 1.00) – Indicates modest operating cash flow growth.
• Cash to Market Cap Ratio (Cash-MV): -34.57% (score: 0.00) – Suggests the company’s cash reserves are not strongly reflected in its market valuation.
• Profit to Market Cap Ratio (Profit-MV): -42.90% (score: 0.00) – Signals low investor pricing relative to the company’s profitability.
• Interest Coverage Ratio (EBIT / Interest Expense): 1155.17% (score: 3.00) – Strong ability to cover interest expenses.
• Gross Profit on Assets (GPOA): 7.37% (score: 4.00) – Above average asset utilization for generating profits.

Money-Flow Trends

Texas Instruments has seen positive inflows across all fund categories over the last 5 days. The overall inflow ratio is 52.20%, with large and extra-large institutional flows showing inflow ratios of 51.30% and 52.99%, respectively. This suggests strong institutional confidence.

Small investor inflows are also positive at 50.33%, though slightly less than the large-money inflows. This indicates that while retail investors are participating, large institutional players are the main drivers of the current trend.

Key Technical Signals

The technical outlook for TXN is weak, with 3 bearish indicators and no bullish ones observed over the past 5 days. The internal diagnostic score is 1.91, which aligns with the suggestion to avoid the stock.

Key Indicators and Their Scores (0-10):

• Williams %R Overbought: Score 2.82 – Suggests overbought conditions, but not strongly bearish.
• RSI Overbought: Score 1.00 – A strong bearish signal indicating potential price reversal.
• Bearish Engulfing: Score 1.92 – Another bearish candlestick pattern appearing on 2025-08-28.

Recent Chart Patterns by Date:

• 2025-08-22: Williams %R Overbought, RSI Overbought
• 2025-08-26: Williams %R Overbought, RSI Overbought
• 2025-08-28: Bearish Engulfing pattern appears

Insight: Over the past five days, TXN has shown signs of overbought conditions and a bearish engulfing candle on August 28, which is a strong reversal signal. These signals, combined with the weak technical score, suggest investors should be cautious and consider a short-term pull-back or wait for a clearer breakout.

Conclusion

Texas Instruments faces a mixed outlook: strong institutional inflows and positive cash flow metrics contrast with bearish technical signals and analyst disagreement. While the fundamentals remain solid, the weak technical environment suggests it might be wise to wait for a clearer trend or earnings update before committing to new long positions. Investors should monitor both technical levels and upcoming guidance for a more defined direction.