UBS has increased its price target for Texas Instruments (NASDAQ: TXN) to $260 from $245 and retained a Buy recommendation on the semiconductor manufacturer. The new UBS target matches the highest analyst projection for the shares, which are trading at $196.63 and sit roughly 11% below their 52-week high of $221.69.
The bank pointed to improving revenue momentum at Texas Instruments, combined with more constructive commentary from the company on bookings and backlog, as the rationale for the higher target. UBS also described investor sentiment toward TXN as "lackluster at best," despite these operational indicators.
Over the trailing twelve months the company reported revenue growth of 13.05%, a pace that outstrips its five-year compound annual growth rate of 2%. UBS highlighted several end markets where it sees durable upside for Texas Instruments: data-center applications, which are nearing 10% of company sales; rising automotive content; and select pockets of strength in industrial end markets, including factory automation, energy, and aerospace and defense.
According to InvestingPro data referenced in UBS commentary, Texas Instruments is identified as a "prominent player in the Semiconductors & Semiconductor Equipment industry," carrying a Good overall financial health score of 2.56 and a notably stronger profitability score of 3.73. InvestingPro also indicates the shares appear to be trading above their Fair Value estimate.
On cash generation, UBS estimated that TXN is currently producing about $6 per share in free cash flow. The firm projects that free cash flow could rise toward $10 per share within the current year and reach roughly $12 per share next year, assuming revenue grows in the mid-teens percentage range in 2026 and 2027. At present the company reports levered free cash flow of $2.08 billion and a free cash flow yield of 1%.
Analysts polled project revenue growth of 13% for fiscal 2026. UBS also designated Texas Instruments a "Top Pick for 2026," and suggested investors may receive a favorable update on free cash flow at the company's annual Capital Management call scheduled in approximately one month.
Income-oriented investors may find the company noteworthy given its long record of shareholder distributions. InvestingPro data shows Texas Instruments has increased its dividend for 22 consecutive years, maintained dividend payments for 56 consecutive years, and currently offers a dividend yield of 2.89%.
These bullish signals sit alongside more mixed recent operating results. Texas Instruments reported fourth-quarter 2025 earnings that slightly missed consensus forecasts: EPS came in at $1.27 versus an expected $1.29, and revenue was $4.42 billion compared with an anticipated $4.45 billion. Despite those small shortfalls, the company provided revenue guidance for the March quarter of $4.5 billion, a sequential increase of 2% and marginally ahead of the consensus estimate of $4.4 billion.
Not all brokerages share UBS's positive view. Separately, Mizuho raised its price target on Texas Instruments to $160 from $145 but maintained an Underperform rating. That move underscores the range of analyst perspectives that currently exist for the stock as market participants weigh growth opportunities and near-term operational results.
The UBS upgrade and related commentary reflect adjustments to expectations for Texas Instruments amid improving top-line momentum, pockets of end-market strength, and a forecasted step-up in free cash flow per share. Investors will likely watch upcoming company updates, including the Capital Management call, for additional clarity on cash-return plans and the trajectory of bookings and backlog.
What to watch next
- Management commentary at the annual Capital Management call in approximately one month for details on free cash flow and capital return strategy.
- Quarterly revenue and bookings trends, particularly in data-center, automotive, and industrial end markets.
- Analyst revisions and target adjustments following UBS's upgrade and Mizuho's target raise amid differing ratings.