Merrill Keeps Texas Instruments Rating

Analyst Joseph Osha thinks margins will be hard hit, but he likes the chipmaker's long-term positioning

Merrill Lynch recommends accumulate Texas Instruments (TXN ).

Analyst Joseph Osha thinks the company's margins will be hard hit for the rest of 2001. He cut the $0.77 2001 EPS estimate to $0.40, and lowered the $1.03 2002 estimate to $1.00. He says the company is well positioned in both the analog and signal processing businesses.

Osha believes the semiconductor industry is a quarter away from the bottom. He sees relative semiconductor stock performance improving in late Q2 or early Q3 when the bottom to industry growth is reached. He also says Texas Instruments has the best long-term strategic positioning of any large-cap name covered, and he sees a slight return to profitability in Q3. Osha has a $50 12-18 month target and rates the shares near-term accumulate and long-term buy.

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