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Technology Stocks : Texas Instruments - Good buy now or should we wait? -- Ignore unavailable to you. Want to Upgrade?

To: SteveG who wrote (3469)	4/17/1998 10:49:00 AM
From: jad	Respond to of 6180

Gruntal maintains STRONG BUY but lowers earnings! Yesterday, TXN reported Q1 results of $0.44 (excluding charges for the Hitachi operation) came on target with the Street consensus and a slightly better than our forecast. Despite the large losses incurred in DRAMs, TXN was able to improve its manufacturing margins. DSP demand remained excellent particularly from the wireless market; management is forecasting strong growth for 1998 for DSP products. We expect the pricing environment for DRAMs to remain weak, but we believe that volume will improve going forward as the inventory adjustment in the PC industry runs its course and every new PC will utilize memory. The big driver for TXN earnings and revenues for the next few years will be its DSP business, which addresses a broad range of new markets and applications. Moreover, TXN's margins for DSP products are excellent and will improve the overall margin for the company. We are lowering our EPS estimates for 1998 to $2.60 from $2.80 and 1999 to $3.50 from $3.70; the reduction is mainly a result of the magnitude of losses in its DRAM business. We maintain our Strong Buy rating on TXN and our 12- month price target of $75. We believe the company will leverage the next industry upturn through its powerful DSP position. (Mona Eraiba )