Texas Instruments: UBS raises PT to $255, maintains Buy rating.

Texas Instruments: UBS raises PT to $255, maintains Buy rating.

UBS has upgraded its price target for Texas Instruments (TXN) to $255, while maintaining its Buy rating on the stock. The upgrade comes amidst a positive outlook on the semiconductor industry, driven by robust demand for semiconductors in various sectors, including automotive and industrial [1].

Texas Instruments, the largest analog company with a 26% market share and the sixth-largest MCU provider globally, has demonstrated significant market strength with impressive gross margins of 58% and a market capitalization of $196.58 billion [1]. The company's business is heavily concentrated in the automotive and industrial sectors, which represent 35% and 34% of sales respectively [1].

UBS analysts believe that Texas Instruments' current below-trendline shipping levels in its analog and embedded businesses are not entirely attributable to market share loss or competition, but rather stem from a lack of orders and low customer buffer stocks. As the cyclical recovery progresses, UBS expects Texas Instruments' free cash flow generation to outperform peers, despite projecting a more muted earnings recovery [1].

The upgrade comes as Texas Instruments announced a significant $60 billion investment to expand its semiconductor manufacturing facilities across the United States. This investment is expected to support over 60,000 U.S. jobs and bolster the company’s manufacturing capacity to meet rising demand for semiconductors in various applications [1]. The investment includes the construction and ramp-up of seven large-scale fabs in Texas and Utah.

In other recent news, Truist Securities maintained its Hold rating and $171 price target on Texas Instruments, highlighting the company’s potential for revenue growth in the second half of 2025. Cantor Fitzgerald also maintained its Neutral rating with a $200 price target, expressing concerns about gross margin expansion due to increased depreciation expenses. TD Cowen raised its price target for Texas Instruments from $160 to $200, citing discussions with the company’s investor relations team about capital investment and competitive challenges [1].

Citi has reiterated Microchip Technology (MCHP) as its top semiconductor pick, with Texas Instruments ranked second, citing expectations for highest earnings per share growth. Microchip Technology, currently trading at $74.56, has demonstrated strong momentum with a 33% return over the past six months [2].

Goldman Sachs initiated coverage on Texas Instruments with a Buy rating and a price target of $255.00, representing potential upside from the current price of $216.39 [1].

References:
[1] https://www.streetinsider.com/news.php?classic=1&id=25021217
[2] https://www.investing.com/news/analyst-ratings/citi-reiterates-microchip-stock-as-top-pick-texas-instruments-second-93CH-4133307