Analysts from Oppenheimer downgraded Texas Instruments (NASDAQ:TXN) from Outperform to Perform. The decision considers the company’s upcoming report and the perspective that the Q3 print and Q4 guide will be in line, after a few quarters of negative adjustment.
Texas Instruments, known for its broad and varied product catalog and substantial customer base, is appreciated for its focus on long-life industrial, auto, and communications sectors, constituting about 72% of sales. However, Oppenheimer sees challenges ahead.
The analysts anticipate sustained margin pressure in the near to medium term due to management’s investment in capacity and predict gross margin will be impacted in the coming years by factors such as under-utilization, increased depreciation, and aggressive pricing in China, which accounts for about 20% of sales. The persistent competition with smaller suppliers in China also seems to be a long-term scenario.