TXN Sees Bull Notes, Record Highs Before Earnings Week

Texas Instruments will report fourth-quarter earnings next week

Assistant Editor
Jan 21, 2021 at 2:45 PM
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Texas Instruments Inc (NASDAQ:TXN) is in the spotlight today, after receiving a pair of bull notes in the form of price-target hikes. The stock has been steadily climbing on the charts since bottoming out during the broader market's mid-March pullback, resulting in Oppenheimer and Citigroup raising their price targets to $185 and $201, respectively. In response, TXN was boosted to a fresh record high of $175.36 before the stock pulled back, down 0.3% at $172.79 at last check. 

TXN Jan21

Today's price action also comes ahead of next week's fourth-quarter earnings, due out after the bell on Jan. 26. Leading up to the event, the options market is pricing in a post-earnings move of 5.2%, which is higher than the security's average post-earnings swing of 4.3% from Texas Instrument's last eight reports, regardless of direction. A look back at these reports shows that TXN closed five of these next-day sessions higher, including a 6.9% pop in January of 2019. 

A round of upgrades/further price-target hikes could be on the horizon for TXN. Of the 21 analysts in coverage, 13 carry a "hold" or worse rating on the stock. Furthermore, the 12-month consensus price target of $162.04 is a 6.7% discount to current levels.

There's plenty of pessimism in the options pits as well. The equity's Schaeffer's put/call open interest ratio (SOIR) of 2.00 stands higher than all other readings from the past year -- indicating options traders haven't been more put-biased in the last 12 months. 

Lastly, now could be a good time to weigh in on TXN with options. The stock's Schaeffer's Volatility Index (SVI) of 31% stands higher than just 13% of all other readings in its annual range, implying that options players are pricing in relatively low volatility expectations at the moment. 

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