Texas Instruments Stock To $148?

Our multi-factor assessment suggests that it may be time to reduce exposure to TXN stock. We are primarily concerned current valuation and a price of $148 may not be out of reach. We believe there is not much to fear in TXN stock given its overall Strong operating performance and financial condition. But given its Very High valuation, the stock appears Relatively Expensive.

Below is our assessment:

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Let’s get into details of each of the assessed factors but before that, for quick background: With $193 Bil in market cap, Texas Instruments provides semiconductors including power management products and microcontrollers for electronics designers, operating in analog and embedded processing segments.

[1] Valuation Looks Very High

This table highlights how TXN is valued vs broader market. For more details see: TXN Valuation Ratios

[2] Growth Is Inconsistent

• Texas Instruments has seen its top line shrink at an average rate of -3.4% over the last 3 years
• Its revenues have grown 13% from $16 Bil to $18 Bil in the last 12 months
• Also, its quarterly revenues grew 10.4% to $4.4 Bil in the most recent quarter from $4.0 Bil a year ago.

This table highlights how TXN is growing vs broader market. For more details see: TXN Revenue Comparison

[3] Profitability Appears Very Strong

• TXN last 12 month operating income was $6.1 Bil representing operating margin of 34.7%
• With cash flow margin of 40.5%, it generated nearly $7.2 Bil in operating cash flow over this period
• For the same period, TXN generated nearly $5.0 Bil in net income, suggesting net margin of about 28.3%

This table highlights how TXN profitability vs broader market. For more details see: TXN Operating Income Comparison

[4] Financial Stability Looks Very Strong

• TXN Debt was $14 Bil at the end of the most recent quarter, while its current Market Cap is $193 Bil. This implies Debt-to-Equity Ratio of 7.3%
• TXN Cash (including cash equivalents) makes up $4.9 Bil of $35 Bil in total Assets. This yields a Cash-to-Assets Ratio of 14.1%

[5] Downturn Resilience Is Moderate

TXN saw an impact slightly better than the S&P 500 index during various economic downturns. We assess this based on both (a) how much the stock fell and, (b) how quickly it recovered.

2022 Inflation Shock

• TXN stock fell 30.2% from a high of $201.29 on 21 October 2021 to $140.50 on 30 October 2023 vs. a peak-to-trough decline of 25.4% for the S&P 500.
• However, the stock fully recovered to its pre-Crisis peak by 22 May 2024
• Since then, the stock increased to a high of $226.56 on 11 February 2026 , and currently trades at $212.11

 
2020 Covid Pandemic

• TXN stock fell 30.4% from a high of $134.25 on 23 January 2020 to $93.50 on 16 March 2020 vs. a peak-to-trough decline of 33.9% for the S&P 500.
• However, the stock fully recovered to its pre-Crisis peak by 20 July 2020

 
2008 Global Financial Crisis

• TXN stock fell 64.9% from a high of $39.18 on 17 July 2007 to $13.77 on 2 March 2009 vs. a peak-to-trough decline of 56.8% for the S&P 500.
• However, the stock fully recovered to its pre-Crisis peak by 25 July 2013

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