Texas Instruments Incorporated (NASDAQ:TXN) shares are trading higher Thursday after the company reported better-than-expected first-quarter financial results and issued second-quarter guidance above estimates. Also, B of A Securities upgraded the stock from a Neutral rating to a Buy rating and raised its price target from $235 to $320.
- Texas Instruments stock is approaching key resistance levels. What’s behind TXN new highs?
Q1 Results
Texas Instruments reported earnings per share of $1.68, beating the consensus estimate of $1.37. In addition, it reported revenue of $4.82 billion, beating the consensus estimate of $4.52 billion, and representing a 19% year-over-year increase.
The company said the revenue increase was driven by strength in industrial and data center markets.
Texas Instruments also stated earnings per share included a 5 cent benefit that was not part of its original guidance.
Texas Instruments generated $7.8 billion in operating cash flow over the trailing 12 months and reported $4.4 billion in free cash flow during the same period.
"Our cash flow from operations of $7.8 billion for the trailing 12 months again underscored the strength of our business model, the quality of our product portfolio and the benefit of 300mm production," said Haviv Ilan, chairman, president and CEO of Texas Instruments.
Texas Instruments ended the quarter with approximately $3.55 billion in cash and cash equivalents.
Texas Instruments anticipates second-quarter GAAP earnings per share of $1.77 to $2.05, versus the consensus estimate of $1.57. In addition, it sees revenue of $5.00 billion to $5.40 billion, versus the consensus estimate of $4.85 billion.
Analyst Consensus & Recent Actions
The stock carries a Buy rating with an average price target of $245.13. Recent analyst moves include:
- Rosenblatt: Buy (Raises Target to $330.00) (April 23)
- Baird: Outperform (Raises Target to $300.00) (April 23)
- Goldman Sachs: Sell (Raises Target to $200.00) (April 23)
- B of A Securities: Buy (Rises Target to $320.00) (April 23)
Bullish Trend Structure Remains Intact
Texas Instruments is sitting above its prior 52-week high ($238.80), which indicates buyers have been willing to pay up versus last year's range. The stock is trading 23.6% above its 20-day simple moving average (SMA) and 30.8% above its 100-day SMA, a setup that leans strongly bullish for both short- and intermediate-term trend control.
The relative strength index (RSI), a momentum gauge, is 76.67, which puts the stock in overbought territory and often coincides with "hot" momentum that can cool quickly. RSI at 76.67 means upside pressure has been strong enough that pullbacks can show up fast if sentiment shifts.
On trend structure, the 20-day SMA is above the 50-day SMA (bullish), and the golden cross in February (50-day SMA over the 200-day SMA) supports the idea that the longer-term trend flipped back to bullish earlier this year. With the moving average stack still rising, traders typically watch whether any dip holds above the nearest support zone rather than breaking down through it.
- Key Resistance: N/A — the stock is in price-discovery above prior reference highs.
- Key Support: $216.00 — a level where buyers previously showed up and defended pullbacks.
Over the last 12 months, Texas Instruments is up 55.31%, which is consistent with a sustained uptrend rather than a one-off spike. The main technical risk from here is that the stock is stretched far above its moving averages, so any mean-reversion move could feel sharp even if the bigger trend stays intact.
Texas Instruments Shares Rise
TXN Price Action: At the time of publication, Texas Instruments shares are trading 10.98% higher at $262.25, according to data from Benzinga Pro.
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