CFRA, an independent research provider, has provided MT Newswires with the following research alert. Analysts at CFRA have summarized their opinion as follows:
We cut our 12-month target price to $157 from $185, on lower revised P/E of 20x our ’25 EPS view, which we start at $7.83, near peers but below its five-year historical forward average of 23.2x. We reduce our ’23 EPS estimate to $7.04 from $7.53 and ’24 to $7.05 from $8.01. TXN posts Q3 EPS of $1.85 vs. $2.56, beating the $1.84 consensus. Sales fell 14% (flat sequentially) as softness broadened across industrial customers while automotive was resilient. We are wary of elevated inventories (DIOs fell by 2 days to 205 seq.) as well as aggressive capex spend ($5B annual spend through ’27), which is hurting near-term profitability and FCF (9% FCF yield LTM vs. 29% a year ago). We note TXN will start seeing gov’t credits given U.S. expansion by ’24 end. We do see revenue bottoming in the next six months, with industrial demand now see more protracted declines, while TXN’s content growth story remains intact. Personal electronics was a bright spot, growing 20% from Q2 off a low base, while China demand remains soft.