Texas Instruments Incorporated (TXN.US) revenue guidance falls short of expectations, causing concerns. Major institutions are all lowering their target prices.

As of the time of drafting, before Wednesday's opening, the stock price of Texas Instruments Incorporated (TXN.US) dropped by about 8%. The company's third-quarter performance was mixed, with a pessimistic performance outlook, leading analysts to react more pessimistically. Jefferies Financial Group Inc. maintained a "hold" rating on Texas Instruments Incorporated and lowered its target price from $185 to $180. Jefferies Financial Group Inc. analyst Blayne Curtis said, "The report reflects the seasonal decline that typically occurs in the industry, and the cyclical growth in the analog chip sector seems to have temporarily stalled. Texas Instruments Incorporated eventually reduced production utilization to slow the increase in inventory, but this further increased pressure on gross margins. Given the lower relative valuation of Texas Instruments Incorporated compared to the remaining cyclical recoveries in the sector, we will continue to monitor its dynamics." Analysts pointed out that the company's expected performance is lower than market expectations, but it is basically consistent with the expected high single-digit revenue decline resulting from the delayed overall economic recovery. Analysts also stated that they expect this seasonal phenomenon to continue until March next year, which means that related data will need to further decline. However, given the current background, the eventual reduction in utilization rates is the right move. Curtis and his team stated, "We expect other parts of the analog chip sector to also show similar weak performance compared to expectations, which still assume a cyclical recovery. Our performance in the General Motors Company business has consistently fallen short of market expectations, but with this adjustment, this gap should narrow. Considering the lack of any signs of cyclical recovery in the analog chip sector at present, and it may not emerge until the second quarter of next year, we are not optimistic about this sector. As for Texas Instruments Incorporated, we remain cautious." Morgan Stanley maintained an "underweight" rating on Texas Instruments Incorporated, lowering its target price from $192 to $175. Analyst Joseph Moore led the team and said, "Texas Instruments Incorporated showed some growth in September, and we originally expected some margin pressure in December, but the poor revenue guidance caught us by surprise." Analysts stated that they were surprised that there was no seasonal-related uptick in the second half of 2025, but they still expect better revenue performance in the future. Analysts said, "Although we remain cautious in many aspects and believe that revenue guidance for 2026 is likely to be at the lower end of the expected range of $20 to $26 billion, we are still surprised by the seasonal performance in the second half of the year." Moore and his team pointed out that macroeconomic cycles and micro/inventory cycles are expected to moderately drive business, and they also heard more optimistic feedback from surveys on industrial market order rates. These analysts added, "We believe this situation will occur with Texas Instruments Incorporated at some point, but it is somewhat unexpected that we have not seen it happen yet." Meanwhile, CFRA gave Texas Instruments Incorporated a "hold" rating. Analyst Angelo Zino said, "Texas Instruments Incorporated's third-quarter earnings were $1.48 per share, lower than the market expectation of $1.49 per share, but sales increased by 14% (up 7% quarter-on-quarter), exceeding our expectation of 12%, and achieved growth in all terminal markets." Zino pointed out that despite strong revenue performance, earnings per share only increased by 1%, due to increased capital expenditures and $85 million in restructuring charges. Zino said, "Fourth-quarter performance guidance is disappointing, with expected revenue between $4.22 billion and $4.58 billion, earnings per share between $1.13 and $1.39, both below the expected $4.5 billion and $1.39. We expect that, assuming revenue remains stable, earnings per share in 2026 will be close to $8 to $12, and as the pressure on free cash flow eases, cash returns may increase." Furthermore, the target price of Texas Instruments Incorporated was also lowered by several other companies. Susquehanna lowered its target price from $240 to $200. KeyBanc lowered its target price from $240 to $220, while Stifel also lowered its target price from $185 to $170.