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Texas Instruments Inc TXN

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Morningstar’s Analysis

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Texas Instruments May Have Seen the Peak in the Recent Chip Upswing; Maintaining $166 FVE

Brian Colello, CPA Sector Director

Analyst Note

| Brian Colello, CPA |

Wide moat Texas Instruments reported solid third-quarter results but provided investors with a soft fourth-quarter forecast that suggests that near-term broad-based semiconductor demand may have peaked as customers continue to recover from the coronavirus pandemic. Texas Instruments is seeing customers ask for expedited production on fewer and fewer types of chips, rather than an urgency to stock up on all types of chips, similar to what Texas Instruments and its peers saw during most of 2021. Shares were down about 5% after hours to $188, but we maintain our $166 fair value estimate and continue to view shares of this high-quality company as modestly overvalued.

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Company Profile

Business Description

Dallas-based Texas Instruments generates about 95% of its revenue from semiconductors and the remainder from its well-known calculators. Texas Instruments is the world's largest maker of analog chips, which are used to process real-world signals such as sound and power. Texas Instruments also has a leading market share position in digital signal processors, used in wireless communications, and microcontrollers used in a wide variety of electronics applications.

Contact
12500 TI Boulevard
Dallas, TX, 75243
T +1 214 479-3773
Sector Technology
Industry Semiconductors
Most Recent Earnings Sep 30, 2021
Fiscal Year End Dec 31, 2021
Stock Type Cyclical
Employees 30,000

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