Texas Instruments (TXN) Stock Dips, Cowen: Strike Deal with Maxim Integrated
NEW YORK (TheStreet) -- Shares of Texas Instruments (TXN) - Get Report are falling 1.07% to $70.65 this morning as analysts at Cowen urge the company to renew talks to purchase Maxim Integrated Devices (MXIM) in an analyst note cited by Barron's.
The move comes in the wake of a similar merger announced yesterday between chip maker Analog Devices (ADI) and Linear Technology (LLTC) for $14.8 billion in cash and stock.
Cowen said Texas Instruments, a Dallas-based semiconductor company, should follow Analog Devices lead and take advantage of low interest rates by renewing talks to acquire chip maker Maxim, which the company first moved to acquire in October 2015.
"To date and again most recently, Texas Instruments has argued that it prefers to buy back its own stock at ~5% free cash flow yield (at current prices), but a deal with Maxim would seem to potentially present a higher return albeit with some but not overly challenging deal execution risk," Cowen said.
The firm has a "market perform" rating on the company.
Also, Texas Instruments reported better-than-expected 2016 second quarter results on Monday after the closing bell, with earnings of 76 cents per share and revenue of $3.27 billion for the quarter. Wall Street projected that the company would report earnings of 72 cents per share on revenue of $3.2 billion.
Separately, TheStreet Ratings objectively rated this stock according to its "risk-adjusted" total return prospect over a 12-month investment horizon. Not based on the news in any given day, the rating may differ from Jim Cramer's view or that of this articles's author.
TheStreet Ratings rated this stock as a "buy" with a ratings score of A.
The company's strengths can be seen in multiple areas, such as its solid stock price performance, growth in earnings per share, increase in net income, revenue growth and largely solid financial position with reasonable debt levels by most measures. Although the company may harbor some minor weaknesses, TheStreet Ratings feels they are unlikely to have a significant impact on results.
You can view the full analysis from the report here: TXN