Cantor Fitzgerald Reiterates Neutral Rating on Texas Instruments (February 25)
Cantor Fitzgerald analyst Matthew Prisco reiterated a Neutral rating and $250.00 price target on Texas Instruments (NASDAQ: TXN).
“This was about as TI of an event as you can get.
To start with, incremental commentary: 1) Industrial tracking as expected through 1Q thus far, 2) FCF tracking >$8 in CY26 (vs. cons of $6.92), 3) Capex in CY27 could track at or below CY26 levels, assuming 10% rev growth, 4) TXN has now received $555M in government grants during 1Q (a ~$0.60 benefit to FCF), and 5) DOI target has increased to 150-250 days (vs. prior 130 to >200).
The most important takeaway for us here is that we see capex in CY27 now likely tracking above our modeled $1.25B, as we believe TXN could modularly equip R2/L1 dabs, along with spend on general “maintenance” and back-end – which will put some downside risk on FCF.
That said, mgmt. noted that at current cons rev estimates, FCF/sh is tracking above $8 in CY26 – which would suggest that our vision to $9+ FCF/ sh in CY27 remains intact.
We would also note that mgmt. showed an $8-12 FCF/sh range in CY26, the same range as last year’s presentation where the upside case was anchored in revs of $26B – a bit of an aggressive scenario with cons currently sitting at $19.6B, so we would take this range with a grain of salt today.
Elsewhere, this is really a status quo event, with the TXN story tracking generally as expected and no change to our thesis on the name.
As such, we reiterate our Neutral rating and $250 price target (equating to 28x CY27 FCF/sh).”
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