Texas Instruments Incorporated (NASDAQ: TXN) reported forecast-beating results Tuesday for the first quarter but issued cautious comments on the semiconductor industry cycle.
Raymond James analyst Chris Caso reiterated a Market Perform rating.
UBS: Texas Instruments Stock Still Lags
With slightly below-consensus guidance and limited visibility into the second-half, Texas Instruments is "working its way through the cycle," Arcuri said in a Wednesday note.
The company did not offer anything new to support the "breathtaking" rally across the semiconductor stocks this year, the analyst said.
" ... The combination of a fairly big inventory overhang and pressure on OpM leave us still believing that this stock still lags even if the market and semis keep working."
UBS said its 2020 outlook is slightly better due largely to 5G ongoing content growth and tighter operating expenditure control. The valuation isn't cheap either, the firm said.
Raymond James: 'The Stock Has Beaten Us To A Bullish Call'
Texas Instruments' first-quarter upside was driven mainly by unexpected communications strength, Caso said in a Tuesday note.
The second-quarter guidance, which was below consensus and well below seasonal, reflects the effects of the industry slowdown, the analyst said.
"Nonetheless, with estimates fairly well reset, this is the point in the cycle when we would typically be ready to recommend buying TXN for better growth into next year," Caso said.
Raymond James remains cautious due to the run in the semiconductor group and the valuation of Texas Instruments.
The Price Action
Texas Instruments shares were rising 1.35 percent to $117.95 at the time of publication Wednesday.
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