Key Stats for TXN Stock
- Year-to-Date Performance: 22%
- 52-Week Range: $140 to $231
- Valuation Model Target Price: $324
- Implied Upside: 53%
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What Happened?
Texas Instruments stock is up about 22% year to date, recently trading near $212 per share as investors reacted to improving free cash flow visibility and moderating capital intensity heading into 2026.
Shares have moved closer to the upper end of their $140 to $231 52 week range, reflecting renewed confidence in the company’s cash generation profile.
The stock has climbed this year primarily because management signaled that the heavy investment phase is nearing completion while free cash flow is accelerating. Investors responded to guidance that free cash flow per share could exceed $8 in 2026 as capital expenditures decline, improving the outlook for dividends and buybacks.
That shift toward stronger cash conversion has supported multiple expansion despite the stock trading at roughly 39x trailing earnings.
This week, during its 2026 Capital Management call, Texas Instruments reported that 2025 operating cash flow rose 13% to $7.2 billion and free cash flow reached $3.23 per share, up 97% from 2024.
Capital expenditures totaled $4.6 billion in 2025 but are expected to decline to $2 billion to $3 billion in 2026 as 300 millimeter capacity expansions near completion, and CFO Rafael Lizardi said the company is “on track to deliver more than $8 per share of free cash flow in 2026.”
Institutional positioning remained active. Sumitomo Mitsui Financial Group raised its stake 46.6% to 25,507 shares, Mitsubishi UFJ Asset Management increased its position 10% to 5,033,746 shares worth about $925 million, Greenland Capital Management boosted holdings 66.3% to 58,151 shares, and Camrose Capital Investment Partners increased its stake 10.9% to 224,619 shares valued at about $41.27 million.
Primecap Management trimmed its stake 8.9% and Generation Investment Management reduced exposure 53.8%, yet institutional ownership remains high at roughly 84.99%, reinforcing strong long term sponsorship behind the stock’s advance.
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Is TXN Undervalued?
Under valuation assumptions, the stock is modeled using:
- Revenue Growth (CAGR): 10.9%
- Operating Margins: 39.2%
- Exit P/E Multiple: 30.2x
Revenue is projected to rise from about $19.6 billion in 2026 toward roughly $24.1 billion by 2028, driven by content expansion in automotive, automation growth in industrial markets, and accelerating demand tied to data center power and connectivity infrastructure.
Industrial, automotive and data center now represent about 75% of revenue, giving TXN exposure to long cycle, high content markets rather than short cycle consumer demand.
Operating margins near 39% reflect structural advantages from expanding internal 300 millimeter wafer production.
As more wafers shift to 300 millimeter and internal manufacturing surpasses 95% over time, per unit costs decline and operating leverage improves when volumes recover. This manufacturing strategy is designed to drive margin durability rather than rely solely on cyclical pricing.
Free cash flow remains central to the thesis. Management expects more than $8 per share of free cash flow in 2026 as CapEx declines, which would materially increase dividend capacity and buyback flexibility. With 22 consecutive years of dividend increases and continued share repurchases, capital returns amplify per share growth as the cycle improves.
Based on these inputs, the valuation model estimates a target price of $324, implying about 53% upside from current levels.
At around $212 per share, Texas Instruments appears undervalued if revenue growth normalizes and free cash flow scales as expected in 2026.
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How Much Upside Does TXN Stock Have From Here?
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All it takes is three simple inputs:
- Revenue Growth
- Operating Margins
- Exit P/E Multiple
From there, TIKR calculates the potential share price and total returns under Bull, Base, and Bear scenarios so you can quickly see whether a stock looks undervalued or overvalued.
If you’re not sure what to enter, TIKR automatically fills in each input using analysts’ consensus estimates, giving you a quick, reliable starting point.
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