Wolfe Research Raises Texas Instruments Price Target to $315
Wolfe Research analyst Chris Caso raised the price target on Texas Instruments (NASDAQ: TXN) to $315.00 (from $260.00) while maintaining an Outperform rating.
“TXN posted a strong report, with 1Q revenue up 9% q/q (7% ahead of consensus) and well better than seasonal.
The company guided 2Q revenue up 8% q/q (also 7% ahead of consensus), modestly better than seasonal. Several things stand out to us from the report. Growth has been led by industrial and datacenter.
Industrial has resumed normalization following a strong 1H25 and stalled growth in 2H25.
And while TXN isn’t thought to be a datacenter/AI play (we have it at 12% of revenue), it nearly doubled y/y in 1Q.
We think datacenter becomes an increasingly strong growth driver through next year, particularly as TXN launches more DC/AI specific products to augment what’s being used from their catalog portfolio.
Management was also more bullish on pricing than we’ve heard in the past.
TXN’s competitors have clearly been raising prices, and this has been an important factor in driving our conviction on analog in general.
TXN commentary was more bullish on pricing in 2H and into CY27 as annual contracts are renegotiated. Our rev/EPS estimates move to $21bn/$7.52 for CY26 and $23.8bn/$9.12 for CY27.
Importantly, we expect over $10bn in CY27 FCF, assuming capex remains flat y/y.
A central element of our TXN upgrade last summer was the company’s ability to accelerate FCF as they come to the end of their CapEx cycle as the business recovers.
The pending SLAB acquisition will also moderately add to EPS and FCF in CY27, with more to come as they move SLAB products onto TXN internal manufacturing.
At the after hours price, TXN is trading at 24x our CY27 FCF, which we do think leaves room for the stock, with more FCF to come if the recovery strengthens, which is why TXN is among our favorite analog ideas.”
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