Texas Instruments Incorporated (TXN) shares have tumbled since late July, driven lower by its tepid earnings outlook.

TXN stock took another dive after it disappointed Wall Street once again with its guidance when it reported on October 24. Texas Instruments is trading below multiple key moving averages as well.

TI’s Basics

Texas Instruments or TI designs and manufactures analog and embedded semiconductors. TI’s chips are utilized within the automotive and industrial sectors, as well as consumer electronics, communications equipment, and beyond.

The analog chip maker is staring down near-term weakness within the historically cyclical chip sector due to wider macroeconomic trends.

Texas Instruments fell short of both our Q3 earnings and revenue estimates. TI’s sales came in flat sequentially and dropped 14% from the year-ago period. The firm said that its automotive growth continued in Q3 but noted that its industrial weakness broadened.

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Image Source: Zacks Investment Research

Zacks estimates call for its revenue to fall 12% in the fourth quarter and for its adjusted earnings to drop by 30% YoY. TI’s fiscal 2023 earnings are projected to slide by 25% YoY and then slip another 5% next year. 

Texas Instruments stock is down over 20% since its Q2 report in July and nearly 30% from its 2021 peaks. TI shares are now trading firmly below both their 50-day and 200-day moving averages.

Worst still, the stock is far beneath its 200-week level for the first time in the last decade and trading under its 50-month moving average.

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Image Source: Zacks Investment Research

Bottom Line

Some investors might be thinking about taking advantage of TXN’s huge downturn and view its technical levels as an opportunity to buy Texas Instruments near what could be its lows. But the company’s downward earnings revisions help it land a Zacks Rank #5 (Strong Sell) at the moment and its valuation level is not very appealing yet either.

It might be best to stay away from Texas Instruments shares for now and look to other semiconductor names or tech stocks that are providing upbeat guidance. 

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