Texas Instruments (TXN) Stock Forecast & Price Target

Texas Instruments demonstrates a robust financial performance with a year-to-date revenue growth of approximately 50% in Data Center-related segments, bolstered by significant increases in automotive and enterprise systems. The company reported a free cash flow of $2.4 billion over the past 12 months, reflecting a 65% year-over-year increase, and revenue for F3Q25 reached $4.7 billion, exceeding consensus estimates with strong contributions from both Analog and Embedded Processing segments. Additionally, Texas Instruments has shown a consistent commitment to shareholder returns, having distributed $6.6 billion over the past year and raised its quarterly dividend to 4%, marking 22 consecutive years of dividend increases.

Texas Instruments's inventory levels have improved slightly, but they still reflect a concerning trend with 215 days of inventory, potentially indicating an ongoing struggle to align production with customer demand. Although cash flow from operations was strong at $2.2 billion, the company's gross margins decreased to 57.0%, which was below both internal and consensus estimates, signaling potential operational inefficiencies or pricing pressures. Furthermore, the guidance for fourth-quarter revenue at $4.4 billion, representing a 7% sequential decline, along with expectations of lower gross margins due to reduced fabrication utilization, highlights a challenging outlook for the company amid broader economic uncertainties.