Texas Instruments Maintains Hold Rating Amid Uncertain Capital Management and Cyclical Recovery Outlook

Analyst Joseph Quatrochi from Wells Fargo maintained a Hold rating on Texas Instruments (TXN – Research Report) and keeping the price target at $200.00.

Joseph Quatrochi has given his Hold rating due to a combination of factors, primarily focusing on Texas Instruments’ (TI) capital management and cyclical recovery outlook. The company’s recent capital management review revealed no changes to its free cash flow (FCF) targets for 2026, maintaining a cautious stance on improving demand visibility and cycle dynamics, which are crucial for revenue and FCF recovery. Additionally, TI’s reiterated 2026 scenario ranges, with revenue expected to be between $20 billion and $26 billion, and a minimum capital expenditure of $2 billion, reflect a stable yet uncertain outlook.
Another factor influencing the Hold rating is TI’s focus on its automotive and industrial markets, which are expected to drive growth. Despite positive strides in diversifying its industrial customer base and expanding opportunities in data centers, TI’s ability to achieve the lower end of its revenue targets remains uncertain, as current estimates are slightly below expectations. Furthermore, while the company has maintained its FCF and capital return targets, there is cautious optimism regarding its ability to return to previous levels, as dividends and share repurchases have significantly exceeded FCF in 2024. These elements collectively suggest a measured approach, warranting a Hold rating for the stock.

In another report released yesterday, Bank of America Securities also maintained a Hold rating on the stock with a $220.00 price target.

Based on the recent corporate insider activity of 89 insiders, corporate insider sentiment is negative on the stock. This means that over the past quarter there has been an increase of insiders selling their shares of TXN in relation to earlier this year.