Texas Instruments (NASDAQ:TXN) Shares Gap Down on Analyst Downgrade

Key Points

• Texas Instruments shares fell significantly after Morgan Stanley downgraded the stock from a price target of $197.00 to $192.00, opening at $175.88 after a previous close of $182.60.
• Despite the downgrade, some analysts maintain a positive outlook, with Benchmark restating a "buy" rating and slapping a target price of $220.00 on the stock.
• Texas Instruments announced a quarterly dividend of $1.36, resulting in an annualized yield of 3.1% while maintaining a high payout ratio of 99.63%.

Texas Instruments Incorporated (NASDAQ:TXN - Get Free Report) shares gapped down before the market opened on Monday after Morgan Stanley lowered their price target on the stock from $197.00 to $192.00. The stock had previously closed at $182.60, but opened at $175.88. Morgan Stanley currently has an underweight rating on the stock. Texas Instruments shares last traded at $177.83, with a volume of 1,609,364 shares traded.

TXN has been the subject of a number of other research reports. Benchmark restated a "buy" rating and issued a $220.00 target price on shares of Texas Instruments in a report on Monday, September 8th. Mizuho reduced their target price on Texas Instruments from $205.00 to $200.00 and set a "neutral" rating for the company in a report on Wednesday, July 23rd. Arete initiated coverage on Texas Instruments in a report on Thursday, June 26th. They issued a "neutral" rating and a $203.80 target price for the company. Wells Fargo & Company reduced their target price on Texas Instruments from $215.00 to $195.00 and set an "equal weight" rating for the company in a report on Wednesday, July 23rd. Finally, Seaport Res Ptn upgraded Texas Instruments from a "strong sell" rating to a "hold" rating in a report on Monday, July 21st. Two investment analysts have rated the stock with a Strong Buy rating, twelve have given a Buy rating, thirteen have assigned a Hold rating and four have given a Sell rating to the company. According to MarketBeat, Texas Instruments currently has an average rating of "Hold" and a consensus price target of $213.82.

Insider Activity

In other news, VP Ahmad Bahai sold 1,500 shares of the firm's stock in a transaction dated Monday, August 25th. The stock was sold at an average price of $205.35, for a total value of $308,025.00. Following the sale, the vice president directly owned 38,883 shares of the company's stock, valued at approximately $7,984,624.05. This trade represents a 3.71% decrease in their ownership of the stock. The sale was disclosed in a document filed with the SEC, which can be accessed through this hyperlink. Corporate insiders own 0.57% of the company's stock.

Institutional Investors Weigh In On Texas Instruments

A number of institutional investors have recently added to or reduced their stakes in the stock. Vanguard Group Inc. boosted its holdings in Texas Instruments by 1.5% during the second quarter. Vanguard Group Inc. now owns 95,447,320 shares of the semiconductor company's stock valued at $19,816,773,000 after purchasing an additional 1,426,360 shares in the last quarter. State Street Corp boosted its holdings in Texas Instruments by 2.6% during the second quarter. State Street Corp now owns 43,325,014 shares of the semiconductor company's stock valued at $8,995,139,000 after purchasing an additional 1,084,364 shares in the last quarter. Geode Capital Management LLC boosted its holdings in Texas Instruments by 1.3% during the second quarter. Geode Capital Management LLC now owns 22,224,770 shares of the semiconductor company's stock valued at $4,595,478,000 after purchasing an additional 279,755 shares in the last quarter. Charles Schwab Investment Management Inc. boosted its holdings in Texas Instruments by 2.0% during the first quarter. Charles Schwab Investment Management Inc. now owns 21,915,824 shares of the semiconductor company's stock valued at $3,938,274,000 after purchasing an additional 428,356 shares in the last quarter. Finally, Invesco Ltd. boosted its holdings in shares of Texas Instruments by 3.3% in the 2nd quarter. Invesco Ltd. now owns 14,068,306 shares of the semiconductor company's stock worth $2,920,862,000 after acquiring an additional 443,738 shares in the last quarter. 84.99% of the stock is owned by institutional investors and hedge funds.

Texas Instruments Stock Down 2.9%

The firm has a market capitalization of $161.12 billion, a price-to-earnings ratio of 32.60, a P/E/G ratio of 2.98 and a beta of 1.02. The company has a current ratio of 5.81, a quick ratio of 3.88 and a debt-to-equity ratio of 0.86. The firm has a fifty day moving average price of $197.93 and a 200 day moving average price of $186.28.

Texas Instruments (NASDAQ:TXN - Get Free Report) last announced its earnings results on Tuesday, July 22nd. The semiconductor company reported $1.41 EPS for the quarter, topping the consensus estimate of $1.32 by $0.09. The business had revenue of $4.45 billion for the quarter, compared to the consensus estimate of $4.31 billion. Texas Instruments had a return on equity of 30.10% and a net margin of 30.23%.Texas Instruments's revenue was up 16.4% compared to the same quarter last year. During the same period in the previous year, the business earned $1.17 EPS. Texas Instruments has set its Q3 2025 guidance at 1.360-1.600 EPS. Sell-side analysts anticipate that Texas Instruments Incorporated will post 5.35 EPS for the current fiscal year.

Texas Instruments Announces Dividend

The firm also recently announced a quarterly dividend, which was paid on Tuesday, August 12th. Stockholders of record on Thursday, July 31st were issued a $1.36 dividend. This represents a $5.44 annualized dividend and a dividend yield of 3.1%. The ex-dividend date of this dividend was Thursday, July 31st. Texas Instruments's payout ratio is presently 99.63%.

Texas Instruments Company Profile

Texas Instruments Incorporated designs, manufactures, and sells semiconductors to electronics designers and manufacturers in the United States and internationally. The company operates through Analog and Embedded Processing segments. The Analog segment offers power products to manage power requirements across various voltage levels, including battery-management solutions, DC/DC switching regulators, AC/DC and isolated controllers and converters, power switches, linear regulators, voltage references, and lighting products.

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