Texas Instruments Incorporated TXN

Because the market is pricing a free-cash-flow recovery, not trailing profit. At about $301, TXN trades near 51 times trailing earnings — over double its ten-year average near 22 times. The reason is the capital-spending roll-off: after roughly $20 billion of fab construction crushed free cash flow, capex falls from $4.55 billion in 2025 toward $2–3 billion in 2026, and management guides free cash flow above $8 per share. The multiple discounts that cash arriving in full.

Yes — it rose to $2.60 billion in 2025, about $2.85 per share, from roughly $1.64 in 2024. The driver is mechanical: capital spending peaked near $4.8 billion in 2024 and is guided to $2–3 billion in 2026 as the Sherman and Lehi fabs finish, so cash the build-out consumed reappears. Management targets above $8 per share for 2026, though analyst consensus sits closer to $7 — the gap between guidance and consensus is part of what the price is testing.

Industrial and data center. First-quarter 2026 revenue rose about 19% to $4.825 billion, with the operating margin back to 37.5%. Industrial, the largest and most profitable end market, grew more than 30% from a year earlier in its eighth straight sequential gain, while a new data-center business — power and signal-chain chips for AI server racks — grew roughly 90%. Automotive, by contrast, stayed soft and flat sequentially, with China weak.

Timing, cyclicality, and competition. The price near 51 times earnings assumes the $8 of free cash flow arrives on schedule and the cycle recovers without a pause — yet industrial is still about 15% below its 2022 peak and automotive remains flat. The $7.5 billion all-cash purchase of Silicon Laboratories adds debt and integration risk, and Chinese analog rivals are gaining on commodity parts, with some posting revenue up 40% to 66% in a single quarter, in a market that takes roughly half of TXN's product.

The average target sits below the price. Across 37 analysts the mean target is about $293, against a stock near $301 — meaning the consensus already views it as fully valued. The range is unusually wide: $200 at the low from Goldman Sachs and $400 at the high from Seaport. MainRatios' own conservative methodology puts intrinsic value at $136–$221, well below both the price and the mean target.