Down 16% In A Month, Is Texas Instruments A Good Bet After The Coronavirus Threat Passes?

-4.42%
Downside
174
Market
166
Trefis
TXN: Texas Instruments logo
TXN
Texas Instruments

On Monday, March 16, the stock markets fell 12%, the biggest sell-off since 1987, and one of the biggest drops of all time. Although markets recovered around 6% on Tuesday, March 17, on expectations for massive federal stimulus to address the ongoing economic crisis, it again fell 5% on March 18th, before reporting a marginal increase on 19th March.
There were two distinct trends driving the sell-off. Firstly, the increasing number of Coronavirus cases in the U.S and other countries outside China is causing mounting concerns of a global economic slowdown (on Wednesday, March 11, WHO declared coronavirus a pandemic outbreak creating further panic in the markets). Secondly, a sharp decline in crude oil prices after Saudi Arabia increased production in a price war with Russia spooked investors further.

Texas Instruments (NASDAQ: TXN) stock fell around 10% between March 9 and March 19, and almost 16% since early February, considering the impact that the outbreak and a broader economic slowdown could have on the semiconductor business. Going by the trends seen during the 2008 economic slowdown, it’s likely that TXN stock could see a strong recovery, and it will likely outperform the broader markets when the crisis winds down.
In our interactive dashboard analysis, 2007-08 vs. 2020 Crisis Comparison: How Did Texas Instruments Stock Fare Compared with S&P 500?, we take a look at how the company’s stock reacted to the economic crisis of 2008 and compare its performance with the S&P 500.

Texas Instruments Stock vs. S&P 500 Over 2020 Coronavirus/Oil Price War Crisis

Relevant Articles
  1. How Will New iPads And Higher iPhone Pricing Help Apple Suppliers?
  2. With New iPhones Around The Corner, Are Apple Supplier Stocks A Buy?
  3. What’s The Outlook Like For Apple Vendors’ Stocks?
  4. What Has Driven Texas Instruments Stock Higher In Recent Years?
  5. Strong Sales Growth Has Helped Texas Instruments Stock Outperform The S&P
  6. What’s Behind Texas Instruments Stock’s Consistent Outperformance Of The Markets?

  • Between March 9th and March 19th, TI’s stock has declined by over 10% and is down by almost 16% since February 1, after the WHO declared a global health emergency.
  • Over the same period, the S&P 500 has declined by almost 19% and is down over 25% since February 1, after the global health emergency was declared by the WHO.
  • We also compare the current coronavirus crash to 4 other market crashes here.

Texas Instruments Stock vs S&P 500 Over 2007-08 Financial Crisis

  • TI’s stock declined from levels of over $27 in October 2007 (the pre-crisis peak) to levels of around $11 in March 2009 (as the markets bottomed out) and recovered to levels of over $20 in early 2010.
  • Throughout the crisis, TI’s stock declined by as much as 60% from its approximate pre-crisis peak. This marked a decline faster than that of the S&P which fell by around 51%.
  • However, the stock also recovered relatively faster, rising by 84% between March 2009 and January 2010. In comparison, the S&P rose by about 48% over the same period.

For more detailed charts and a timeline of the 2008 and 2020 crisis for different stocks, view our interactive dashboard analyses on coronavirus.

See all Trefis Price Estimates and Download Trefis Data here

What’s behind Trefis? See How It’s Powering New Collaboration and What-Ifs For CFOs and Finance Teams | Product, R&D, and Marketing Teams