Texas Instruments shares are trading at a discount

Text size

Uncredited


These reports, excerpted and edited by Barron’s, were recently published by investment and research firms. The reports are a sample of the analysts’ thinking; they should not be considered Barron’s opinions or recommendations. Some of the issuers of the reports have provided, or expect to provide, investment banking or other services to the companies analyzed.

Texas Instruments

TXN-Nasdaq

To buy • Price $152.63 on June 29

by reference

Initiation to buy and a price target of $205 over 12 months. Texas Instruments leads the analog industry by a substantial margin, with just over 6% market share (19% vs. 12.7%) on

Analog devices

[ticker: ADI], which recently acquired Linear Tech and Maxim. TI is also ranked #5 in the embedded processing market, accounting for a 15% share. TI has steadily gained market share in both markets and has built an organization that has an exponentially greater product portfolio and sales/distribution reach than its closest competitors. Yet TI is trading at a discount to its peers. Our price target is based on a blended adjustment of TI’s estimated price/earnings, price/sales and enterprise value/EBITDA (earnings before interest, tax, depreciation and amortization) multiples to that of its peer group.

Robinhood Markets

HOOD-Nasdaq

Market performance • Price $9.12 on June 27

by JMP

Robinhood Shares [jumped today], spurred by a Bloomberg report that private crypto exchange FTX is exploring the possibility of acquiring the company. We believe a deal is unlikely and unnecessary, but the reported interest highlights the perceived value of Robinhood’s platform and stock. We maintain our price target of $36, which implies a multiple of 10x enterprise value/revenue on estimated 2023 revenue.

Apple

AAPL-Nasdaq

Surpass • Price $141.66 on June 28

by Wedbush

So far, iPhone demand is holding up well, despite fears [that it wouldn’t]. China and supply chain issues are expected to peak in concern in the June quarter, then ease in key September/December quarters on the heels of the iPhone 14 launch. Initial bogey and production plans for the iPhone 14 are expected to be flat or slightly higher than the iPhone 13, signaling Apple’s confidence that pent-up demand for this next version remains healthy. We estimate that Apple gained around 300 basis points [3%] of market share in the key region of China over the past 12 months. Apple remains our favorite tech name as we reiterate our outperform rating and $200 price target.

fedex

FDX-NYSE

Perform • Price $233.81 on June 29

by Oppenheimer

FedEx’s 2022 investor meeting yesterday was the first since 2012. The company is targeting high-value customers (eg, small businesses) and e-commerce growth across its ground delivery network and express delivery segments in full growth. [It’s seeking higher] European [profits] through a fully integrated FedEx+TNT operation.

In addition, the company aims to reduce expenses. It introduced Network 2.0, which relies on collaboration between its express, ground and freight units (which were historically operated more individually) and leverages its comprehensive asset base to potentially be more efficient. By FedEx’s 2027 fiscal year, Network 2.0 is expected to drive $2 billion in one-time spending, but generate $2 billion in annual benefits.

Regeneron Pharmaceuticals

REGN-Nasdaq

Sector performance • Price $597.62 on June 29

by RBC Capital Markets

We hosted an investor visit to the company’s headquarters, meeting with several senior executives who lead Regeneron’s oncology and immunology programs. We came away impressed with their measured, long-term approach to forming their oncology portfolio, leveraging extensive preclinical tools to help optimize target selection, antibody design and assay. In immunology, advanced stage of COPD [lung disorder] essays should start reading next year, but remain difficult to handicap. We see many long-term hits, based on solid science, but not necessarily with enough data to draw attention to medium-term risks to Regeneron’s Eylea Core. [retinal-disease] franchise. Our price target is $638.

Soft

CHWY-NYSE

Overweight • Price $35.34 on June 28

by Wells Fargo

We are maintaining our price target of $55, following meetings with CEO Sumit Singh at our 4th Annual Bricks to Clicks Digital Retail Conference

The tone was optimistic, as he indicated that the 2nd quarter is going according to plan, that logistics and automation initiatives remain early innings and that CHWY is making solid progress on expansion initiatives.

Management said the [pet-supply] The category remains resilient, driven by a good pace of purchases of consumables and pet healthcare, offset by some softness in the discretionary categories. The price and promotion environment remains stable and Chewy’s long-term growth orientation should remain intact even in a recessionary scenario. However, management has indicated that operating discipline now takes on even greater importance and marketing restraint is also indicated given the struggling consumer mindset.

To be considered for this section, material should be sent to Research@barrons.com.

Abdul J. Gaspar