Texas Instruments falls as Bernstein downgrades on revenue, margin concerns
wellesenterprises/iStock Editorial via Getty Images
Texas Instruments (NASDAQ:TXN) shares fell more than 2% in pre-market trading on Wednesday as investment firm Bernstein downgraded the analog semiconductor company, citing concerns over revenues and gross margins. 
Analyst Stacy Rasgon downgraded Texas Instruments (TXN) shares to underperform from market perform, but kept his $145 price target, noting that it looks as it Wall Street estimates are too high with the company "structurally" raising spending to build out revenue growth over the next 10 to 15 years. 
Rasgon said it looks as if gross margins are likely headed towards the 60% level - or worse - in "short order", which is "well below expectations." Additionally, Wall Street's consensus for fourth-quarter revenue is "well above" seasonal and there seems to be an "over-exuberance" for 2024 estimates.
For the fourth quarter, a consensus of analysts estimates that Texas Instruments (TXN) will earn $1.84 per share on $4.52B in revenue.
"Putting it all together, Bernstein's numbers appear to be low on the Street going forward as lower gross margins and revenues take their toll," Rasgon wrote.
Analog Devices (ADI), which competes with Texas Instruments (TXN), fell 0.8% in pre-market trading.
Analysts are universally cautious on Texas Instruments (TXN). It has a HOLD rating from Seeking Alpha authors, while Wall Street analysts rate it a HOLD. Conversely, Seeking Alpha's quant system, which consistently beats the market, rates TXN a HOLD.

More on Texas Instruments

Texas Instruments: Short-Term Pain For Long-Term Gain
Texas Instruments: Swim Against The Current
Texas Instruments: Still Not A Buy Despite Expected Dividend Increase
AMD, Intel, others may be at risk from analog, non-AI data center weakness: Citi
Texas Instruments sinks as Wall Street worries over demand, free cash flow