Wedbush Cuts Texas Instruments Target On 'Uncertain Macro And FX Headwinds'

In a report published Thursday, Wedbush analyst Betsy Van Hees maintained an Outperform rating on Texas Instruments Incorporated (NASDAQ: TXN), while lowering the price target from $57 to $55, following the adverse impact of uncertain macros and FX headwinds on the Q3 guidance.

Although the company reported its Q2 results mostly in-line with expectations, the Q3 guidance was weaker than expected due to continuing FX headwinds and macro uncertainties.

According to the Wedbush report, "TI noted that while the automotive end market was strong Y/Y in Q2, industrial was incrementally weaker-than-expected as was wireless infrastructure." Also, while PCs were weak, they largely met expectations.

The automotive segment saw robust year-on-year growth, with almost all sectors within the automotive market growing in the double-digits. However, the communications equipment segment declined year-on-year, driven by a weaker-than-expected wireless infrastructure segment.

Although the Q3 guidance was weaker than expected, it was not "as bad as feared." "TI's Q3 outlook continues to be impacted by general demand weakness in parts of industrial, communications equipment, and personal electronics markets particularly wireless infrastructure and PCs," Van Hees stated.

The Q3, 2015 and 2016 estimates have been lowered. Van Hees believes that "TI is not facing company specific issues, but broader macro headwinds," and that the stock "is one of the safer havens for long-term investors looking for exposure to big cap semis."