Texas Instruments Shares Gain 3.7% on Strong Q4 Results

Shares of Texas Instruments Inc. (TXN) gained 3.7% in the extended trading session on Tuesday after the company reported better-than-expected fourth-quarter 2021 results.

The global semiconductor company designs and produces semiconductors and different types of integrated circuits. It also develops analog chips and embedded processors.

Earnings per share (EPS) jumped 26% year-over-year to $2.27, much higher than analyst expectations of $1.94. Driven by strong demand in industrial and automotive markets, revenues grew 19% to $4.83 billion and surpassed the Street’s estimate of $4.43 billion.

Analog revenue grew 20% year-over-year to $3.8 billion; Embedded Processing revenue rose 6% to $764 million, and Other revenue climbed 35% to $310 million.

The company incurred capital expenditures of $2.5 billion in 2021, up 279% from last year. Also, it generated cash flows from operations of $8.8 billion, compared with $6.1 billion in 2020.

For 2021, Texas Instruments reported revenue of $18.3 billion, up from $14.5 billion in 2020. Also, EPS increased 38.4% year-over-year.

Outlook

Texas Instruments expects to report first-quarter revenue in the range of $4.5 billion to $4.9 billion and EPS between $2.01 and $2.29. Also, it expects the 2022 annual operating tax rate to be about 14%.

Wall Street’s Take

Following the release of the fourth-quarter financial results, Rosenblatt Securities analyst Hans Mosesmann reiterated a Buy rating on the stock with a price target of $230 (32.2% upside potential from current levels).

Mosesmann said, “TI plans to add incremental capacity as the third 300mm wafer fab (RFAB2) comes online in 2H22 and the company begins production in the acquired Lehi fab (also in 2H22 and 2023). These capacity investments are between 45nm – 130nm and are optimized for Analog and Embedded products. In addition, TI continues to have a competitive advantage in manufacturing and technology which allows for lower cost and greater control of the supply chain.”

Overall, the stock has a Moderate Buy consensus rating based on 8 Buys, 5 Holds, and 2 Sells. The Texas Instruments price forecast of $207.86 implies 19.5% upside potential. Shares have gained nearly 9% over the past year.

Blogger Opinions

TipRanks data shows that financial blogger opinions are 91% Bullish on TXN, compared to a sector average of 69%.

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