Stifel Upgrades Texas Instruments to Buy
Stifel analyst Tore Svanberg upgraded Texas Instruments (NASDAQ: TXN) from Hold to Buy with a price target of $250.00 (from $215.00).
“Following an elevated 6-year investment cycle that constrained profitability and returns, we believe TXN is well positioned to capture share in the next analog upcycle and return to strong FCF generation.
Our analysis evaluates the favorable outlook for TXN across five key pillars: (i) a structural FCF inflection as capital intensity moderates; (ii) strategic SLAB acquisition; (iii) AI DC growth; (iv) continuous transition to internal 300mm wafer manufacturing; and (v) analog market share gains.
In our view, TXN is entering a period where multiple tailwinds support the outlook. As such, we are upgrading TXN to Buy with a 12-month TP of $250 (from $215).
This represents a 3.84% CY27E FCF yield derived from our base case scenario. Should the company execute toward our bull case, the target price could reach $286.
Lastly, we note our $250 TP represents 26.0x CY27E P/FCF, which could prove to be conservative.”
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