Where Does Texas Instruments (TXN) Valuation Sit On Its Latest Guidance?
Texas Instruments (TXN) is back in focus after issuing third quarter 2026 guidance that points to revenue between $5.65b and $6.15b and earnings per share in the $2.23 to $2.57 range.
See our latest analysis for Texas Instruments.
Texas Instruments shares have pulled back recently, with a 7 day share price return of down 4.88% and a 30 day share price return of down 2.93%. However, the year to date share price return is 56.08% and the 5 year total shareholder return is 67.74%. This points to strong longer term performance despite short term volatility around earnings, guidance and the latest dividend announcement.
If this Texas Instruments update has you thinking about where else AI driven demand could show up, it may be worth scanning 56 AI infrastructure stocks for other potential ideas.
After Texas Instruments shares cooled off from their recent run, the gap between the current US$277.07 price, the US$321 analyst target and intrinsic value estimates becomes more important. Where does fair value actually sit within that range?
Most Popular Narrative: 36.4% Undervalued
According to the most widely followed valuation narrative on Texas Instruments, the fair value of $435.69 sits well above the recent $277.07 close. That puts the spotlight on how this narrative ties long term cash generation to today’s price.
Texas Instruments is in the midst of a multiyear capacity-expansion cycle that is temporarily suppressing free cash flow but materially enhancing the company’s long-term competitive position. The buildout of U.S.-based 300mm analog manufacturing is expected to structurally improve cost efficiency, support higher gross margins, and increase supply-chain resilience. As these assets ramp and utilization normalizes, TXN should regain its historical free-cash-flow profile, supported by diversified end-market exposure across industrial, automotive, aerospace/defense, and energy infrastructure.
Curious what sits behind a fair value nearly $160 above today’s price. According to niteco, the narrative leans heavily on stronger margins, steady revenue growth and a richer future earnings multiple. Want to see how those ingredients combine into one valuation story.
Result: Fair Value of $435.69 (UNDERVALUED)
Have a read of the narrative in full and understand what's behind the forecasts.
However, Texas Instruments still faces risks if the multiyear fab buildout extends cash flow pressure for longer than expected, or if AI related demand materialises more slowly than hoped.
Find out about the key risks to this Texas Instruments narrative.
Another View On Texas Instruments Valuation
While the popular Texas Instruments narrative sees the stock as 36.4% undervalued at a fair value of $435.69, the SWS DCF model paints a more cautious picture. At a current price of $277.07, TXN is trading above an estimated future cash flow value of $245.76, which points to an overvalued outcome instead.
This gap between a user narrative and the SWS DCF model raises a simple question for investors: Which matters more right now, the upbeat long term story around margins, revenue and multiples, or the cooler message from current cash flow projections?
Look into how the SWS DCF model arrives at its fair value.
Next Steps
Seeing mixed signals on Texas Instruments and not sure which side of the story resonates more? It can help to review both the concerns and the upside potential in detail through the 2 key rewards and 2 important warning signs.
Looking for more investment ideas beyond Texas Instruments?
Do not stop your research at Texas Instruments. The screener can quickly surface other stocks that fit the kind of portfolio you want to build.
- Target steadier cash flows and capital strength by reviewing the solid balance sheet and fundamentals stocks screener (48 results) that may handle tougher conditions more comfortably.
- Hunt for potential mispricings by scanning the 49 high quality undervalued stocks that combine strong fundamentals with prices that still look reasonable.
- Prioritise resilience by checking the 83 resilient stocks with low risk scores that score well on stability and could help smooth out the bumpier parts of your portfolio.
This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned.
Have feedback on this article? Concerned about the content? Get in touch with us directly. Alternatively, email editorial-team@simplywallst.com