Texas Instruments Incorporated (TXN) Shares: Cheap or Risky?

Texas Instruments Incorporated (NASDAQ:TXN) saw a downside of -1.61% to $190.26 after subtracting -$3.11 on Tuesday. The 5-day average trading volume is 2,334,077 shares of the company’s common stock. It has gained $197.75 in the past week. An average of 3,305,794 shares of the company has been traded in the last 20 days, and the 50-day average volume stands at 3,151,270.

TXN’s 1-month performance is 1.43% or $0.42 on its low of $189.03 reached on 10/04/21. The company’s shares have touched a 52-week low of $141.33 and high of $200.92, with the stock’s rally to the 52-week high happening on 09/24/21. YTD, TXN has achieved 17.82% or $26.94. However, the current price is down -5.31%% from the 52-week high price.


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Insider Transactions

On Aug 05, 68 days have gone by since the last insider trading activity for Texas Instruments Incorporated (TXN). Knecht Julie C. (VP & Chief Accounting Officer) most recently sold 7,399 shares at $192.17 per share on Aug 05. This transaction cost the insider $1,421,836. Director, Hobby Jean M., sold 900 shares at a price of $192.04 on Aug 05. Then, on Jul 29, Sr. Vice President BAHAI AHMAD sold 3,682 shares at a price of $189.71 per share. This transaction amounted to $698,527.

Valuation Metrics

The company’s PE ratio for the last five years has touched a high of 33.30 and a low of 15.87. TXN stock has a beta of 0.99. Moving on to other valuation ratios, the trailing price-to-sales (P/S) ratio is 10.65 while the price-to-book (PB) in the most recent quarter is 16.01, with the price to cash flow ratio at 62.82.

Texas Instruments Incorporated pays an annual dividend of $4.08 per share. Its dividend yield is 2.14% and the payout ratio is 54.50%. TXN paid $1.15 a share compared with prior rate of $1.02, up 11.3% from last year’s. The company has boosted its dividend for the last 1 consecutive years with the latest dividend increase of $0.13 reported on Wednesday September 15 2021. Measured over the last 3 years, the Dividend has been growing by 75.47% yearly.

It is projected that Texas Instruments Incorporated’s next ex-dividend date will be on 29-Oct-2021. TXN is expected to distribute $1.15 as its next dividend.

Texas Instruments Incorporated’s quick ratio for the period ended June 29 was 4.20, with the current ratio over the same period at 5.10 meaning that TXN stock is able to fulfill its debt obligations. As well, the company’s long term debt to equity for the quarter ending June 29 was 0.52, while the total debt to equity was 0.56. In terms of profitability, the gross margin trailing 12 months is 65.50%. The trailing 12-month EBITDA margin is 47.78% while for the period ending June 29; Texas Instruments Incorporated’s operating margin was 45.20%. The firm’s gross profit as reported stood at $9.27 billion against revenue of $14.46 billion.

Earnings Surprise

For the quarterly period ending June 29 this year, Texas Instruments Incorporated’s cash and short-term investments amounted to $3.74 billion against total debt of $6.25 billion. Net income and sales went up compared to those figures reported in the previous quarter. Net income grew 29.28% to $4.58 billion, while revenue of $4.29 billion was 6.35% off the previous quarter. Analysts expected TXN to announce $1.83 per share in earnings in its latest quarter, but it posted $2.05, representing a 12.00% surprise. EBITDA for the quarter stood at more than $2.46 billion. TXN stock balance sheet for the quarter ending June 29 shows that total liabilities totaled 9.45 billion, with total debt at $6.25 billion. Shareholders hold equity totaling $923.21 million

Technical Picture

Let’s look briefly at Texas Instruments Incorporated (TXN) price momentum from a technical analysis perspective. The 9-day relative strength index as at close on 11 October was 40.33% to suggest the stock is trending Neutral, with historical volatility in this time period at 16.53%.

The stock’s 5-day moving average is $193.88, reflecting a -1.45% or -$2.81 change from its current price. TXN is currently trading -2.07% above its 20-day SMA, +3.11% above its 100-day SMA. However, the stock’s current price level is away from the SMA50 and SMA200 by +0.18% and +18.21% respectively.

Stochastic %K and %D was 35.30% and 44.17% and the average true range (ATR) pointed at 3.54. The RSI (14) points at 44.90%, while the 14-day stochastic is at 17.16% with the period’s ATR at 3.50. The stock’s 9-day MACD Oscillator is pointing at -0.07 and -1.58 on the 14-day charts.

Analyst Ratings

In the most recent analyst report for Texas Instruments Incorporated (NASDAQ: TXN), KeyBanc Capital Markets reiterated its an Overweight rating for the company but lifted their price target by $240 to $250. Analysts offering their rating for TXN stock have a consensus rating for the stock as Hold. Currently, 4 brokerage advisors rate TXN as a “sell,”, while 14 advise that investors “Hold.” 1 analysts have rated the stock as underweight. 2 rates the stock as overweight while 11 have offered a “buy” rating.

What is TXN’s price target for the next 12 months?

Analysts have a consensus price target ranging from a low of $170.00 and a high of $250.00, with their median price target at $200.00. Looking at these predictions, the average price target given by analysts is for Texas Instruments Incorporated (TXN) stock is $205.22.

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