Shares of Texas Instruments (NASDAQ:TXN) fell about 8% premarket on Wednesday after mixed third-quarter results and weaker outlook drew lukewarm reactions from analysts.
Jefferies kept a Hold rating on Texas Instruments’ stock and lowered the price target on the shares to $180 from $185.
“Guidance reflects a more normal seasonal decline as the cyclical upswing seems to be on pause for the Analog group. TXN finally lowered utilizations to slow the build of inventories, but that puts further pressure on GMs [gross margins]. We’ll continue watching from the sidelines on TXN given relative valuation vs. the least amount of cyclical recovery left in the group,” said analysts led by Blayne Curtis.
The analysts noted that the company’s guidance was below Street estimates but largely in-line with expectations for mid/high-single digit revenue decline as the broader recovery is pushed out.
The analysts said that they expect seasonality to continue into March, suggesting numbers need to come down further, but finally cutting utilization is the right move given the backdrop.
“We expect the rest of the Analog group to see similar softness vs estimates that are still modeling a cyclical recovery. We’ve been below the Street on GMs, but that gap should narrow with this reset. We don’t love the Analog group here given the lack of any cyclical recovery until maybe Q2 next year and remain on the sidelines for TXN, said Curtis and his team.
Morgan Stanley maintained its Underweight rating on the shares but decreased the price target on the stock to $175 from $192.
“TXN had upside in September, and we expected some margin pressure in December, but weaker revenue outlook was a surprise,” said analysts led by Joseph Moore.
The analysts said they are surprised that there has been no upside versus seasonal in the second half of 2025, and still expect better revenues ahead.
“While we have been cautious on a variety of factors, and felt that the company would likely be below the low-end of its $20-26bn revenue range for 2026 on the day that guidance was given, we are still surprised at a seasonal 2H,” said the analysts.
Moore and his team noted that the macro cycle and the micro/inventory cycle should support modest tailwinds to the business, and they continue to hear modestly upbeat commentary from their checks around order rates in industrial markets.
“We think that should materialize for TI at some point, and are a little surprised that we aren’t seeing that now,” the analysts added.
Related stocks: Marvell Technology (MRVL) and Analog Devices (ADI) each fell nearly -2% premarket on Wednesday, while Lattice Semiconductor (LSCC) was largely flat.