Texas Instruments (NYSE:TXN) Should Perform Solid Assuming Macroeconomic Strength

Texas Instruments (NYSE:TXN) and the rest of the chip sector should do fairly well going forward, according to FBR Capital, but that is under the assumption macroeconomic performance remains supportive to the industry.

FBR said, "Management commentary suggests that lead times continue to fall, channel inventories remain at appropriate levels, and the sector is seeing a "soft landing". While chip stocks have rallied hard into the end of the year, and some EPS estimate risks and shipment base reset risks exist, we generally think chip stocks could "melt up" further in 2011 (absent a major macroeconomic convulsion or muni/sovereign debt crisis) given: (1) reasonably robust holiday sell through and underlying demand for electronics; (2) large chip content gains in handsets and industrial/auto applications; (3) generally healthy supply chain inventories; and (4) still-attractive valuation multiples vs. history and other tech
sectors."

FBR Capital maintains an "Outperform" rating on Texas Instruments, which was trading at $33.54, up $0.13, or 0.39 percent, as of2:34 PM EST. They have a price target of $40 on them.