UPDATE: Oppenheimer Upgrades Texas Instruments (TXN) to Outperform

(Updated - December 15, 2015 9:30 AM EST)

Oppenheimer upgraded Texas Instruments (NASDAQ: TXN) from Perform to Outperform with a price target of $70. Analyst Rick Schafer said he sees multiple catalysts to drive both top and bottom-line growth, and he noted that the company offers investors the best FCF and capital return profile in the group.

Schafer explained, "There are four core drivers which underpin our positive stance on TXN. First, TXN is levered to some of the fastest growing and sexier end markets within the sticky, high margin automotive segment."

The analyst continued, "As we discussed in our mid-2015 Automotive Semiconductor White Paper “Driving It Home”, TXN has ~15% exposure to the automotive segment, and has seen double-digit growth in each of the last two years, with exceptional growth being driven by ADAS, Infotainment and Instrument Clusters. We believe this growth is sustainable long term, as average semiconductor content outgrows vehicle units at least 2x over the next decadeplus. Second, we see steady gross margin expansion driven by a better mix of 300mm-based products, higher fab utilization, and the roll-off of depreciation as the 300mm transition continues. Third, wireless basestation, which has been a headwind for many in the group, appears to have bottomed, and should reaccelerate in 2016, as China, India, and Europe build out their LTE networks. Last, TXN is one of the best “Stewards of Capital” within our coverage universe, committed to returning 100% of free cash flow to investors through a combination of share repurchases and dividends."

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 $56.22 yesterday.

---

Serious News for Serious Traders! Try StreetInsider.com Premium Free!

---

You May Also Be Interested In

• CIBC Downgrades Celestica (CLS) to Neutral
• Safran SA (SAF:FP) (SAFRF) PT Raised to EUR220 at CFRA
• Svenska Handelsbanken AB (SHBA:SS) (SVNLY) PT Lowered to SEK105 at CFRA