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Analog microchips manufacturer delivers 12th straight quarterly earnings beat
Thursday 11 Feb 2021 Author: Steven Frazer

TEXAS INSTRUMENTS (TXN) $175.12

Gain to date: 53.1%

Original entry point: Buy at $114.42p, 21 May 2020


Analog microchips manufacturer Texas Instruments continues to knock the lights out after extending its long run of beating earnings expectations to 12 quarters in a row.

Investors who followed our original Great Idea in May last year will be sitting on 50%-plus returns, a superb performance for a company valued at more than $160 billion.

For the last quarter of 2020, Texas Instruments generated earnings per share (EPS) of $1.80, outstripping expectations for $1.34 by 34% and jumping 61% year-on-year. Revenue of $4.08 billion was 22% up year-on-year and 13% above forecast.

Analysts remain optimistic as the semiconductor upcycle swings through 2021 and possibly beyond. Consensus EPS estimates are currently pitched at $6.43 for the whole of this year, rising to $7.30 in 2022, compared with 2020’s $5.97.

Designing vital bits of technology kit and retaining extensive pricing power, the long-run growth potential we flagged originally looks as attractive today as it did then, and that bodes well for further share price gains as the world economy recovers from its Covid hangover.


SHARES SAYS: Still a buy for the longer-term. 

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