The stock of Texas Instruments (TXN) is down 3% in after hours trading after the semiconductor company reported forward guidance that fell short of Wall Street’s expectations.
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The legacy chipmaker announced fourth-quarter 2024 earnings per share (EPS) of $1.30, which was ahead of the $1.21 consensus forecast among analysts that track the company’s progress. Revenue in the October through December quarter totaled $4.01 billion, which was above analysts’ expectations of $3.90 billion.
Despite beating Wall Street forecasts on the top and bottom lines, Texas Instruments’ results were overshadowed by underwhelming guidance. The Dallas, Texas-based company forecast revenue in the current first quarter of 2025 in a range of $3.74 billion to $4.06 billion. The midpoint of that range is only slightly ahead of a consensus outlook that calls for sales of $3.85 billion.
Weak Earnings Outlook
However, what really sunk TXN stock was the company’s earnings-per-share guidance of $0.94 to $1.16, which was below the $1.17 consensus estimate on Wall Street. During the company’s earnings call with media and analysts, management at Texas Instruments said that demand for semiconductors in the automotive markets of Europe, the U.S., and Japan continues to be weak.
Texas Instruments sells microchips and processors that can be found in virtually every sector of the economy, from vehicles and industrials to consumer electronics. The company has more than 100,000 customers worldwide. TXN stock is up 21% over the past 12 months.
Is TXN Stock a Buy?
The stock of Texas Instruments has a consensus Moderate Buy rating among 23 Wall Street analysts. That rating is based on nine Buy, 12 Hold, and two Sell recommendations issued in the last three months. The average TXN price target of $211.89 implies 5.62% upside from current levels. These analyst ratings are likely to change following today’s results.
