Raymond James Upgrades Texas Instruments, A Clear Market Leader

In a report issued on Monday, Raymond James upgraded Texas Instruments Incorporated (NASDAQ: TXN) from Market Perform to Strong Buy due to strong company fundamentals. Raymond James also issued a target price of $62.

Analysts J. Steven Smigie and Hans Mosesmann wrote, "TI has a dominant share in analog, strong channel relationships, and high free cash flow, which is being returned to shareholders. We think shares offer a positive risk/reward given the recent pullback in the price of the stock. While the most recent report/guide was soft, its overall Auto and Industrial business at roughly 50% of revenue and its main focus remains healthy. Guidance was also somewhat impacted by currency, but that does not change the overall health of its business. Telecom was weak, but telecom business tends to be lumpy and China and other regions globally still have networks to be built out. If business strengthens, TI is poised to benefit; however, if business for the group softens from here, TI seems one of the most defensive names given its scale."

Texas Instruments is a clear market leader in the analog market, as its nearest competitor only has as much as 30 percent of Texas Instrument's revenue. Due to a company focus on increasing capacity in its manufacturing facilities, Texas Instruments is in a strong position to increase its profit margins and meet increasing demand for their products.

Furthermore, Raymond James believes that Texas Instruments will be a key player in the Internet of Things trend, given its portfolio of connectivity technologies. This positions the company to increase market share and grow revenue in the future.