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December 12, 2006

Guidance reduced at Texas Instruments, Tues. Dec. 12, 2006, 5:45 PM

The mid-quarter report from Texas Instruments did not look so hot to UBS. They reiterated their Buy-2 rating, but lowered their sales forecast, dropped the EPS estimate by -7 pct to $1.75, and reduced the 12-month Price Target by -5 pct to $38. The PT is based on 22x EPSe for 2007. Presently the shares are trading at just 17x 2007 est. earnings.

Posted by Posted by Bill Cara on December 12, 2006 05:45:52 PM | Category: 45 Info Technology

Discourse

They may have a target of $38 (22x 2007 EPS), but I believe that 2006 will be peak earnings for this cycle and the bad news that is coming out in the semiconductor space will continue and you will see a decrease both in actually earnings and the multiple people are willing to pay for these.

Was short into the call last night and, while disappointed with today's reaction (up on the warning?), I believe that there is still $6 - $8 of downside over the next couple of quarters.

Posted by: bb [TypeKey Profile Page] at December 12, 2006 9:03 PM [link]

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