Texas Instruments Incorporated (NASDAQ: TXN) has been under pressure as semiconductor demand softened across industrial and automotive markets. The stock trades near $161/share, down from earlier highs this year, as investors wait for signs of recovery in chip spending. Still, TXN’s strong margins, reliable cash flow, and history of disciplined capital allocation continue to make it a core holding among long-term investors.
Recently, Texas Instruments reported third-quarter results that slightly beat expectations, showing resilience in earnings despite a weak industry backdrop. Management noted improving trends in automotive demand and continued progress on its new 300mm wafer fabs in Texas, an investment expected to boost manufacturing efficiency and long-term cost advantages. These updates show TXN is focused on strengthening its foundation for the next chip cycle.
This article explores where Wall Street analysts think Texas Instruments could trade by 2027. Based on analysts’ average estimates, we used TIKR’s Guided Valuation Model to outline the stock’s potential path and what it could mean for investors. These figures reflect current analyst expectations and are not TIKR’s own predictions.
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Analyst Price Targets Suggest Modest Upside
Texas Instruments trades around $161/share today. The average analyst price target sits near $190/share, implying roughly 18% potential upside over the next year.
Forecast range:
- High estimate: ~$245/share
- Low estimate: ~$125/share
- Median target: ~$195/share
- Ratings: 13 Buys, 2 Outperforms, 17 Holds, 3 Underperforms, 3 Sells
This range suggests analysts see modest upside, reflecting confidence in TXN’s stability but limited near-term catalysts. For investors, that means the market already prices in much of the company’s strength in analog chips and cash generation. Upside from here likely depends on a rebound in end-market demand and steady progress from its 300mm capacity expansion, which could enhance cost efficiency and margins over time.
In short, analysts expect TXN to perform steadily rather than spectacularly, with dependable execution and shareholder returns driving the story more than multiple expansion.
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Texas Instruments: Growth Outlook and Valuation
The company’s fundamentals appear solid despite recent softness:
- Revenue is projected to grow ~10.5% annually through 2027
- Operating margins are expected to stay near ~37.5%
- Shares trade at roughly ~27.5x forward earnings
- Based on analysts’ average estimates, TIKR’s Guided Valuation Model using a 27.5x forward P/E suggests ~$230/share by 2027
- That implies about 44% total returns, or roughly 18% annualized
These figures suggest TXN can compound steadily as demand normalizes and manufacturing investments start to pay off. For investors, the stock offers dependable growth, strong free cash flow, and a stable dividend profile that make it appealing for long-term income and compounding returns.
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What’s Driving the Optimism?
Texas Instruments remains one of the most dependable names in the semiconductor industry. Its analog and embedded processing chips power everything from industrial systems to vehicles, making its products essential even in slower cycles. The company’s consistent focus on operational discipline and long product life cycles continues to support strong profitability.
Management has also made long-term investments in manufacturing, including new 300mm wafer fabs in Texas designed to lower costs and secure future capacity. As chip demand normalizes, these moves should help TXN capture higher margins and position itself for the next upturn in semiconductor spending.
For investors, these strengths suggest TXN has the tools to maintain its industry leadership and gradually rebuild earnings growth as markets recover.
Bear Case: Slower Recovery and Valuation Risk
Even with these positives, TXN’s valuation appears full given the current environment. The stock trades near 27x forward earnings, a premium to peers despite slowing revenue growth. If chip demand takes longer to rebound or if pricing pressure intensifies, earnings momentum could flatten.
Rising capital expenditures are another risk, as spending on new fabs may weigh on near-term free cash flow and limit buybacks. For investors, the main concern is that TXN’s strengths may already be reflected in its valuation, leaving less room for multiple expansion until growth accelerates again.
Outlook for 2027: What Could Texas Instruments Be Worth?
Based on analysts’ average estimates, TIKR’s Guided Valuation Model using a 27.5x forward P/E suggests TXN could trade near $230/share by 2027. That would represent about 44% total returns, or roughly 18% annualized from today’s levels.
While this points to solid compounding potential, it also assumes a gradual demand recovery and stable margins. To deliver stronger gains, TXN would likely need faster end-market growth or greater-than-expected cost efficiencies from its new fabs.
For investors, Texas Instruments looks like a steady long-term compounder rather than a high-upside play. Its combination of predictable earnings, high free cash flow, and shareholder-friendly policies makes it a reliable choice for those seeking consistent returns through the semiconductor cycle.
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