Analysts upgrade Texas Instruments after strong quarter signals broader industrial demand

Texas Instruments raised its outlook on April 22 after first-quarter results beat expectations, and analysts quickly upgraded the stock. (ti.com) (morningstar.com) The Dallas chipmaker reported $4.83 billion in revenue, up 19% from a year earlier, with net income of $1.55 billion and earnings of $1.68 a share. Texas Instruments said earnings included a 5-cent benefit that was not in its original guidance. (ti.com) For the second quarter, Texas Instruments forecast revenue of $5.00 billion to $5.40 billion and earnings of $1.77 to $2.05 a share. MarketWatch, via Morningstar, said analysts had expected $5.06 billion in sales and $1.78 in earnings per share. (ti.com) (morningstar.com) Chief executive Haviv Ilan said first-quarter growth was led by industrial and data-center customers. He told analysts the industrial signal looked “a little bit broader this time” after five or six months of continued growth. (ti.com) (morningstar.com) That point mattered because Texas Instruments is one of the chip companies most tied to factory equipment, automotive systems and other industrial electronics. MarketWatch said Citigroup still calculates TI’s industrial revenue at 16% below its fourth-quarter 2021 peak, even after the recent rebound. (morningstar.com) The data-center business was even stronger. MarketWatch reported about 90% year-over-year growth there, marking the eighth straight quarter of sequential growth for that segment. (morningstar.com) Analysts treated the quarter as more than a one-off beat. Futurum wrote on April 27 that management pointed to improving order breadth, steady customer behavior and a stronger-than-typical second-quarter outlook. (futurumgroup.com) Bank of America upgraded Texas Instruments to Buy from Neutral on April 23 and raised its price target to $320 from $235, according to 24/7 Wall St. The same report said JPMorgan lifted its target to $280, KeyBanc to $325, Benchmark to $315 and Jefferies to $260, while Goldman Sachs kept a Sell rating with a $200 target. (247wallst.com) Texas Instruments also said analog revenue rose 22% to $3.9 billion and embedded processing revenue rose 12% to $700 million in the quarter. Those are the product lines investors watch most closely because they feed industrial machines, vehicles, power systems and connected devices. (futurumgroup.com) (ti.com) The immediate test is whether that broader industrial demand holds through the June quarter. For now, Texas Instruments has given Wall Street a clearer sign that the recovery is extending beyond a narrow burst of artificial-intelligence spending. (morningstar.com) (futurumgroup.com)