MKM Partners Cuts Estimates on Texas Instruments (TXN); Everything’s Fine, Except for Demand...

July 24, 2012 1:04 PM EDT
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Price: $77.08 +1.78%

Rating Summary:
    25 Buy, 19 Hold, 4 Sell

Rating Trend: Up Up

Today's Overall Ratings:
    Up: 19 | Down: 19 | New: 13
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MKM Partners maintains a 'Neutral' on Texas Instruments (NASDAQ: TXN) price target of $28.00 (from $29.00).

Analyst, Daniel Berenbaum, lowers his price target, citing in-line Q2 and weak guidance. Berenbaum was surprised at TXN's positive tone (on the conference call) and thinks bulls will be chatting it up.

Berenbaum said, "However, our due diligence suggests at least a few more tough quarters – while broad-based semi inventory de-stocking was completed in early 2Q – muted end demand and short lead times are leading customers to be cautious with new orders. On the bright side, we don’t see a revenue cliff and TXN is clamping down on spending, but even raising our growth expectations for 2013 (off the lower base), we don’t see enough earnings power to justify putting new money to work at current levels."

MKM drops Q3 EPS from $0.52 to $0.45, revs from $3.6B to $3.3B, FY12 from $1.72 to $1.64 and revs from $13.6B to $13.1B. FY13 lowered from $2.10 to $1.97 and revs from $14.4B to $13.9B.

For an analyst ratings summary and ratings history on Texas Instruments click here. For more ratings news on Texas Instruments click here.

Shares of Texas Instruments closed at $26.82 yesterday.

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