Texas Instruments (NASDAQ) released a weaker than expected Q2 forecast Wednesday, which sent its shares plummeting more than 33% during premarket trading on Wednesday.

Revenue was reported at $4.91 Billion, an increase of 14% YoY. This is higher than the analysts consensus estimate of $4.72 Billion. Strong sales were fueled by “growth in industrial and automotive.”

TXN reported Q2 earnings per share of $2.35 in comparison to $1.87 the previous year. In the calculation of EPS, we added a 2 cent benefit to items not listed in our initial guidance.

Analog revenues grew 16% YoY to $3.82 Billion, surpassing consensus estimates of $3.67 Billion. The embedded processing revenue was $782 million. This is 2% more than the $769 million estimate.

In Q2, revenue is expected to range from $4.2 billion up to $4.8 billion. This falls short of the consensus estimate of $4.96 trillion.

TXN projects EPS between $1.84 and $2.26. This is less than $2.28 per Share.

“This outlook comprehends an impact due to reduced demand from COVID-19 restrictions in China,” the company said in a press release.

Barclays analyst Blayne Curtis lowered the price target to $150.00 per share from $170.00 and said TXN’s results should be seen as “merely the beginning of a broader cyclical correction.”

“The lower June guidance was a surprise, but we do expect increased shortages and shutdowns to be a bigger trend through earnings… We do see a substantial cycle coming and this reset as only the beginning of a larger correction. TXN’s history shows that every year of DD growth is followed by a decline in the following year. After 27% growth in 2020, we believe a substantial correction will be necessary. We do recognize that analog names are typically safer in a market correction but we still don’t believe the stock has corrected enough to become interesting,” Curtis said on the Underweight-rated TXN stock.

BofA Analyst Vivek Arya has lowered his price target from $200.00 to $190.00 per Share and is now more bullish than his on TXN Barclays (LON:) colleague.

“We reiterate Buy on a strong track record of consistent share gains, free cash flow generation and returns, and profitability resilience even in a downcycle,” Curtis said in a note.

By Senad Karaahmetovic