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  "documentTitle": "Texas Instruments (TXN)",
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  "authorName": "Jesse Cohn",
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  "presentationDate": "2024-05-28 00:00:00",
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  "notes": "The slide uses analyst quotes to build a case against the company's current capital allocation strategy.",
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      "text": "In the absence of information, investors have voted with their capital, as demonstrated by TI’s TSR performance.",
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      "text": "Analyst quotes from Citi, AB, Wells Fargo, and Cowen expressing skepticism regarding TI's revenue targets and capital expenditure.",
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      "text": "TI has remained committed to this level of spend even as the analog market has suffered from one of the largest down cycles in the last decade.",
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      "text": "TI's reputation as one of the best-managed semiconductor companies in the world was earned over many years of thoughtful industry leadership, prescient strategic decisions, operational",
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      "text": "In the absence of information, investors have voted with their capital, as demonstrated by TI's TSR performance. Today, TI has the second-lowest percentage of “buy” ratings among global semiconductor peers.",
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      "kind": "paragraph",
      "text": "While TI may argue that this impairment of free cash flow performance is merely temporary, TI has made no commitments to the investment community.",
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      "text": "\"We are skeptical that TXN can achieve their revenue targets given its growth rate of mid-single digits. Given elevated capex and depreciation, we believe TI’s margins will remain under pressure through 2026 unless capex is cut.\" — Citi; \"Texas Instruments (TXN): We wish we could all have a 15-year investment horizon...downgrading to Underperform\" — AB; \"We are initiating coverage of TXN with an Underweight (UW) rating and $150 price tgt. Our rating reflects a concern TXN can’t achieve rev tgts & related utilization; i.e., 300mm capacity expansion plans intended to reach $30B FY26 rev. 19% CAGR.\" — Wells Fargo; \"We still believe investing in mature node capacity is the right strategic decision long-term. That said, with a 20% CAGR off 2024 Street estimates needed to reach 2030's $45B capacity target, we think the magnitude of the development is difficult for investors to underwrite, even with subsidies.\" — Cowen",
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      "kind": "title",
      "text": "TI's History Provides the Blueprint for Shareholder Returns",
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