Texas Instruments (NYSE:TXN) is set to release its Q4 on January 23rd. After a stellar Q3, in which they showed a 12% yoy increase in revenue and a beat on EPS expectations by 0.12 (10.7%), Texas Instruments is now expected to report EPS of 1.09 in Q4. This would mark a 7% yoy growth in earnings. Having beaten analyst estimates for the past seven quarters (with a consistent 12-13% beat for the past three quarters), it is reasonable to expect that Texas instruments may report an EPS well above analyst's expectations. But regardless of how earnings play out, I think Texas Instruments is a safe long-term bet, and a good stock to consider adding to your portfolio on any pullback.
Texas Instruments operates in a favorable environment. The Internet of Things (IoT) is an industry with the expected CAGR of 23% until 2021. Being the most powerful player in this environment, it is quite likely that Texas Instruments can continue to grow at double-digit rates over the next three years. Every exciting new electronic gadget that enters the market is likely to include semiconductors that could be produced by Texas Instruments. Electronic chips such as those produced by Texas Instruments are becoming exceedingly more commonplace in household devices, and especially in automobiles. The market for autonomous and semi-autonomous cars is expected to grow ten-fold over the next seven years. The opportunities are plentiful for Texas Instruments, and being one of the world's largest companies producing these chips, with over 44,000 patents, Texas Instruments is well positioned to take advantage of the overall growth in its industry.
