TXN Stock Extends Gains To 6th Consecutive Week — Why Are Analysts Bullish?

• Barclays noted that Texas Instruments looks a lot more constructive, especially in the industrial and data center segments.
• Jefferies called Texas Instruments’ earnings report “rock solid,” while highlighting that the company is experiencing a strengthening industrial recovery and continued acceleration of its data center business.
• BofA analyst Vivek Arya expressed confidence in the company’s ability to leverage the surge in capital expenditure in U.S. fabrication facilities over the past three years.

Shares of Texas Instruments Inc. (TXN) are on track for their sixth consecutive week of gains after the company’s first-quarter (Q1) earnings and guidance for the second (Q2) quarter blew past Wall Street expectations.

Texas Instruments’ robust earnings and forecast led analysts to become increasingly bullish on the company’s prospects, with a slew of price target hikes and ratings upgrades following the company’s results.

Texas Instruments shares were up nearly 12% in Thursday’s pre-market trade.

Why Are Analysts Increasingly Bullish On TXN?

According to TheFly, analysts at Barclays upgraded Texas Instruments to ‘Equal Weight’ from ‘Underweight’ with a price target of $250, up from $175. The firm stated that Texas Instruments has posted multiple quarters of growth in the industrial segment. Barclays noted that Texas Instruments looks a lot more constructive, especially in the industrial and data center segments.

Jefferies called Texas Instruments’ earnings report “rock solid,” while highlighting that the company is experiencing a strengthening industrial recovery and continued acceleration of its data center business. The firm hiked its price target for TXN stock to $260 from $210 while keeping a ‘Hold’ rating.

BofA analyst Vivek Arya upgraded TXN stock to ‘Buy’ from ‘Neutral’, while hiking the price target to $320 from $235. Arya expressed confidence in the company’s ability to leverage the surge in capital expenditure in U.S. fabrication facilities over the past three years to gain share in the current environment where there is shortage of chips.

JPMorgan’s Harlan Sur hiked the price target for Texas Instruments to $280 from $227 while keeping an ‘Overweight’ rating. Sur stated that the company’s gross margins were better than expected and that they expect improvement throughout the year, driven by better factory utilization.

Texas Instruments Posts Robust Earnings, Outlook

Texas Instruments reported earnings per share (EPS) of $1.68 on revenue of $4.83 billion, beating Wall Street estimates of an EPS of $1.37 on revenue of $4.53 billion.

For Q2, Texas Instruments forecast EPS in the range of $1.77 and $2.05, while it expects revenue to come in between $5 billion and $5.4 billion. The consensus estimate is for an EPS of $1.55 on revenue of $4.87 billion.

Texas Instruments stated that the company’s performance during Q1 was driven by the industrial and data center segments.

How Did Retail Traders React?

Retail sentiment on Stocktwits around Texas Instruments trended in the ‘extremely bullish’ territory with message volumes at ‘extremely high’ levels at the time of writing.

One bullish user on the platform stated that Texas Instruments has had “ground breaking” advancements over the years.

Another user thinks that TXN shares could soar to $300 by the end of the year.

TXN stock is up 36% year-to-date and 61% over the past 12 months. The S&P 500 ETF (SPY) is up 35% over the past 12 months, while the Invesco QQQ Trust (QQQ) is up 47%.

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