Texas Instruments (TXN) Reports Shows 3Q Was The Bottom, Not 4Q, PT Raised to $134 at SunTrust

SunTrust analyst William Stein raised the price target on Texas Instruments (NASDAQ: TXN) to $134.00 (from $125.00) after the company confirmed the stabilizing demand environment with Q4 sales beating by 3%, and Q1 sales guidance ~1% above street. The analyst believes this marked 3Q19 as TXN's bottom,

The analyst maintained a Hold rating stating "For TXN, demand (y/y growth) bottomed in Q3, despite
last quarter's guidance implying a Q4 bottom. Q4 sales beat by 3.1%, driven by strength in analog (~6% beat vs. consensus) across all end markets except comms infra. Q1 sales guidance was 80bps above street, within 1% of normal seasonality. Turning to margins, Q4 GM and OPM beat by 30bps and 100bps respectively, resulting in a 9c EPS beat in the quarter. Finally, TXN announced it is closing its last two 6” wafer fabs. Management expects the transition of the ~$1.5B in sales running through these fabs to 300mm to be completed in the 2023-2025 timeframe, we estimate lifting total-company OPM by 50-100bps".

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