How Did Texas Instruments Perform In Q1?

by Trefis Team
Texas Instruments
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Texas Instruments (NYSE: TXN) once again posted solid growth in Q1, beating both revenue and earnings consensus estimates. Revenues in the quarter came in about 11% higher than the year ago period, while earnings jumped by 36%, largely due to the lower tax rate. The company’s revenue and earnings came in at the high end of its guided range. The company should benefit from the higher production of 300mm fabs, increasing demand for chips from the auto industry, driven by autonomous and semi-autonomous vehicles and other technological advancements. We expect the company to post strong results in 2018. Below we provide a brief overview of the company’s results and what lies ahead.

The company’s stock is now trading at around $104, and we believe it is undervalued in comparison to our price estimate of $107. We have created an interactive dashboard elaborating on our valuation process. Please click on the link to adjust drivers and arrive at your own price estimate.

Texas Instruments is set to gain from the increasing demand for chips from automakers, driven by autonomous and semi-autonomous vehicles and other technological advancements, coupled with strong demand in the industrial segment. Both these markets are increasing the use of semiconductors, which should provide significant growth opportunities for TI. In addition, the planned installations of 5G wireless networks later this year, and eventual further expansion to other cities in the U.S., should result in strong demand for TI equipment, leading to significant long term growth.

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