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With a market cap of $178.6 billion, Texas Instruments Incorporated (TXN) is a leading semiconductor company specializing in designing and manufacturing semiconductors and integrated circuits. The Dallas-based company also develops digital light processing technology and educational products such as calculators, microcontrollers, and multi-core processors.
Companies valued at $10 billion or more are generally considered "large-cap" stocks, and Texas Instruments fits this criterion perfectly, boasting a market cap exceeding the mark. Texas Instruments excels in producing analog chips and embedded processors, which form the backbone of its revenue stream, contributing to over 80% of its earnings and cementing its status as a leading force in the semiconductor sector.
However, the analog chip manufacturer has slipped 4.7% from its 52-week high of $206 achieved late last month. Despite this recent pullback, shares of TXN are up 14.2% over the past three months, outperforming the broader S&P 500 Index's ($SPX) 4.9% gains over the same time frame.
Longer term, TXN is up 15.1% on a YTD basis, outpacing SPX's 12.2% gains. However, shares of Texas Instruments have gained 15.2% over the past 52 weeks, lagging behind SPX's 25% returns over the same time frame.
TXN has been trading above both its 50-day and 200-day moving averages since late April, indicating a bullish price trend.
TXN has been underperforming over the past year due to declining sales, particularly in its analog semiconductor and embedded products segments, alongside pressure on margins and reduced demand from major customers in sectors such as automotive and communications equipment. However, the stock surged 5.6% on April 24 following better-than-expected Q1 results, driven by strong performance in its analog segment, and upbeat revenue guidance for the current quarter, despite a decrease in gross margin and an increase in inventory levels.
Nevertheless, rival Analog Devices, Inc. (ADI) is outperforming – not just TXN but the broader equity benchmarks. Analog Devices stock has gained 33.4% over the past 52 weeks and is up 19.6% on a YTD basis.
Given Texas Instruments’ mixed price performance, analysts are cautious about its prospects. The stock has a consensus rating of "Hold" from the 28 analysts in coverage, and the stock is currently trading above its mean price target of $185.22.
On the date of publication, Sohini Mondal did not have (either directly or indirectly) positions in any of the securities mentioned in this article. All information and data in this article is solely for informational purposes. For more information please view the Barchart Disclosure Policy here.
