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Texas Instruments Inc TXN

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Stock XNAS Rating as of
$209.14 −0.12 (0.06%)
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As of Delayed Price Closed

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Texas Instruments: Fair Value Estimate Rises to $175 From $146 With Brighter Medium-Term Assumptions

Brian Colello

We are raising our fair value estimate for wide-moat Texas Instruments to $175 from $146, as we are encouraged by the company's medium-term revenue and free cash flow estimates outlined during its capital allocation call. We still view shares as overvalued and are skeptical that TI can achieve some of its base-case or most bullish revenue assumptions over the next few years, but if it is able to do so, our new fair value estimate might be conservative.

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Price vs Fair Value

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TXN is trading at a 15% premium.
Price
$209.14
Fair Value
$144.00
Uncertainty
Medium
1-Star Price
$466.77
5-Star Price
$635.80
Economic Moat
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Capital Allocation
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Bulls Say, Bears Say

Bulls

Texas Instruments has a leading market share position in the lucrative analog semiconductor market, holding scale advantages that virtually no other rival can match.

Bears

If US-China trade tensions continue, customers in China may gravitate to analog and embedded parts made by TI’s neutral European-based rivals, such as STMicro, Infineon, or NXP.

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News

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Trading Information

Previous Close Price
$209.26
Day Range
$208.81–211.72
52-Week Range
$139.48–214.66
Bid/Ask
$208.65 / $208.91
Market Cap
$190.95 Bil
Volume/Avg
3.1 Mil / 5.5 Mil

Key Statistics

Price/Earnings (Normalized)
37.42
Price/Sales
11.92
Dividend Yield (Trailing)
2.49%
Dividend Yield (Forward)
2.60%
Total Yield
2.49%

Company Profile

Dallas-based Texas Instruments generates over 95% of its revenue from semiconductors and the remainder from its well-known calculators. Texas Instruments is the world's largest maker of analog chips, which are used to process real-world signals such as sound and power. Texas Instruments also has a leading market share position in processors and microcontrollers used in a wide variety of electronics applications.
Sector
Technology
Industry
Semiconductors
Stock Style Box
Large Core
Total Number of Employees
34,000
Website
https://www.ti.com

Competitors

Valuation

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Metric
TXN
MCHP
NXPI
Price/Earnings (Normalized)
 37.4221.2117.68
Price/Book Value
 11.096.756.93
Price/Sales
 11.926.684.86
Price/Cash Flow
 31.0818.7015.78
Price/Earnings
TXN
MCHP
NXPI

Financial Strength

Metric
TXN
MCHP
NXPI
Quick Ratio
 3.400.931.27
Current Ratio
 4.621.942.21
Interest Coverage
 14.579.128.53
Quick Ratio
TXN
MCHP
NXPI

Profitability

Metric
TXN
MCHP
NXPI
Return on Assets (Normalized)
 16.43%12.86%13.39%
Return on Equity (Normalized)
 32.38%30.67%36.81%
Return on Invested Capital (Normalized)
 19.98%17.50%17.08%
Return on Assets
TXN
MCHP
NXPI

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Morningstar Rating for Stocks
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