Texas Instruments stock leads analog chip shares lower

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  • Shares of Texas Instruments fell Friday, leading other analog chipmaker stocks lower.

  • The losses came after the company’s disappointing profit forecast raised concerns about broader industry headwinds.

  • Jefferies analysts said the forecast from the world’s largest analog chip maker suggests that the recovery of analog chips may be slower than previously expected.

Texas Instruments (TXN) shares fell Friday, leading other analog chipmaker stocks lower and weighing on major indexes.

Texas Instruments was the best performing stock in S&P 500Shares fell more than 7% to close at $185.52 on Friday. The move comes a day after the company Disappointing profit forecast It has raised concerns that the analog chip market may experience a slower-than-expected recovery.

Microchip technology stocksMCHP), analog devices (ADIOnsemi (It’s on) and NXP Semiconductors (NXPIThe ground that is being pulled in the technology sector has also been lost Benchmark index low. The S&P 500 fell 0.3%, while the tech-heavy Nasdaq slipped 0.5%.

Jefferies analysts dampened expectations that the Texas Instruments outlook would be a sign of recovery and indicated that the cycle may not bottom out, with the auto sector still recovering further and no signs of an industry recovery yet. More than 70% of Texas Instruments’ products are sold to the auto and industrial end markets, Jeffries said.

The analysts suggested a recovery in the analog segment could come this year or next, but warned that Texas equipment costs and growing yields could prove a more significant headwind than expected. Jefferies maintained a “hold” rating and a $185 price target on the stock.

Morning strategist Brian Colello raised his price target to $185 from $175, calling it “a bit of a near-term bill” for Texas Instruments after several quarters of bullish production, but said he remains confident in the company’s approach, saying investments in high-margin chips could pay off in the long term.

Seven of the 12 analysts polled by Visible Alpha have given the stock a “hold” rating, three have issued a “buy” rating and two have given the stock a “sell” rating as of Friday. A consensus price target of around $205 suggests an 11% upside.

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