TI - Lower Q1 Guidance on 3G Softness

TI's Analog business is tracking along normal seasonality, with projected gross margin stable. We would note that this tone is in contrast to to National Semi's (NSM, $17.82, Hold) recently reported weak results. TI derived ~ 40% revenue from Analog in Dec Q. We believe the company is gaining share from its Analog rivals, especially in the high-performance space...We believe most of the shortfall in TI's Mar Q guidance was due to Nokia. In our opinion, volatility in TI's Nokia business would be a source of much uncertainty for the stock in 2008...Our $32 PT is based on PE of 16x applied to our CY08 GAAP EPS of $2.03 (incl. $0.15 ESO). It's at the low-end of TXN's 3 year P/E multiple of 16x to 30x. We assign relatively low P/E to TXN due to its limited growth rate. Risk to our thesis includes a macro slowdown in the wireless semiconductor space.