Texas Instruments (
) is trading higher ahead of their third quarter earnings report,
scheduled for release after the market closes today. Shares are up
about1.1% in afternoon trading.
The company is expected to report an EPS of $0.69 on revs of $3.69
billion. Last quarter, the company posted an EPS of $0.62 on revs
of $3.5 billion. Last year, TXN had an EPS of $0.42 on revs of
Consensus views this quarter are a 77% and 31% pop to last year's
Q3 EPS and revenue estimates, respectfully.
Shares of the stock have increased moderately though their third
quarter, 12% to $27.14 at the end of September. The stock is
currently trading 13% higher since the start of 2010, and 6.7%
since the end of the third quarter.
A simple valuation reveals shares going for a P/E of 11.5x FY11 EPS
estimates, compared to 17.3x for Qualcomm (Nasdaq: QCOM) and 10.8x
for STMicroelectronics (
Data from Bloomberg has 22 analysts with a Buy rating, 15 with a
Hold, and three recommending to Sell. The analyst price target
average is $29, with a High of $36 and a low of $22.
Analyst Ratings Through the Quarter
Analysts have been rather quiet on TXN following their second
quarter earnings release in July.
In August, Raymond James upgraded the shares from Market Perform to
Outperform, and BMO lowered TXN from Outperform to Market Perform.
Susquehanna downgraded from Buy to Neutral, sort of, noting that
they are not immune to a macro slowdown. They said that they were
resetting their rating to be more constructive when conditions
September saw Caris lower semis, and TXN from Average to Below
Texas Instruments narrowed its outlook in September, seeing an EPS
range of $0.66 - $0.72, compared to the previous range of $0.64 -
$0.74. Revs were narrowed from $3.55 - $3.85 billion to $3.62 -
Wedbush sees TXN offering stability given the tightened guidance
and broad-based strength driven by embedded and analog growth. A
richer product mix should provide modest gross margin tailwinds.
Wedbush notes that management has said Q310 should see growth
across all segments sequentially. Lead times continue to reduce as
capacity controls come online. Inventories have been mixed as
sell-in is matching sell-out, resulting in lean inventories, but
customers are adjusting inventory to more match lower demand.
Wedbush has an Outperform and price target of $34 on the shares.
They're looking for an EPS of $0.69 on revs of $3.7 billion.
Deutsche Bank also expects Texas Instruments to report in-line with
the Street consensus, no surprise there. Embedded processing and
analog units should outperform. They note that "OMAP strength in
Wireless continues to offset relative underperformance in
basebands." They do see some caution in their Q410 outlook based on
softer demand in semi's similar to its peers. Key items to watch
are analog market share gains, gross/operating margin trends,
inventories, and stock buyback plan updates. Deutsche has a Hold
rating on the shares, with a price target of $27.00.
With shares seeming to trade fairly valued, and macroeconomic
conditions priced in, look for the conference call on Q410, FY10
outlooks to drive investor interest in the shares this quarter.
Texas Instruments Inc. is expected to release their Q310 earnings
on Monday, October 25, 2010, at approximately 4:30pm EDT. Stay
tuned to StreetInsider.com's
section to see our analysis of the highly-anticipated quarterly
results within seconds of their release.