Texas Instruments (NASDAQ:TXN) shares rose on Wednesday even as investment firm Citi cut its estimates on the semiconductor company, pointing out worries over deteriorating demand and rising inventories.
Analyst Christopher Danely, who rates Texas Instruments (TXN) shares neutral with a $160 price target, lowered 2022 and 2023 estimates. He now expects the company to generate $18.41B in revenue this year and earn $8.52 per share, down from a prior outlook of $19.41B and $9.16, respectively.
For 2023, he expects Texas Instruments (TXN) to generate $17.8B in sales and earn $7.57 per share, down from $18.3B in revenue and earn $7.79 per share, "driven by the semi downturn."
Texas Instruments (TXN) shares rose slightly less than 0.5% to $155.14 in premarket trading.
Danely added that at a price target of $160, that means Texas Instruments (TXN) is trading at 21 times 2023 earnings, as the firm believes this is a result of the potential for declining margins "due to increasing depreciation and the acquisition of a fab."
Last month, investment firm Benchmark started coverage on the chip maker, noting Texas Instruments (TXN) has continued to gain market share and diversify its businesses.