Texas Instruments Stock Lower After Analyst Downgrade

The stock has shed 20% since its record highs in October

Digital Content Manager
Feb 14, 2022 at 9:32 AM
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The shares of Texas Instruments Incorporated (NASDAQ:TXN) are down 1.4% at $162.17 this morning, following a downgrade from Raymond James to "market perform" from "outperform." The analyst shared its concerns over "rising capital intensity late in the cycle" and a round of unexpected spending details the market wasn't prepared for. It also noted potential risks to earnings and cash flow due to the company's aggressive spending. 

TXN is trading at its lowest levels since March this morning, as the choppy trading the stock has seen recently continues. The security touched a record high of $202.26 in October, and has since shed nearly 20%. 

Circling back to analyst sentiment, the brokerage bunch has been split. Heading into today, 10 of the analysts in coverage called TXN a "hold" or worse, compared to seven "buy" or better ratings. Meanwhile, the 12-month consensus price target of $200.03 is a 21.7% premium to Friday's close. 

Options traders have taken a bearish stance. At the International Securities Exchange (ISE), Cboe Options Exchange (CBOE), and NASDAQ OMX PHLX (PHLX), TXN sports a 50-day put/call volume ratio of 1.03, which stands higher than 86% of readings from the past year. In other words, long puts have rarely been more popular during the past 10 weeks. 

Echoing this, short-term options traders have been a lot more put-biased than usual. This is per TXN's Schaeffer's put/call open interest ratio (SOIR) of 1.41, which is in the 76th percentile of its 12-month range. 

 

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