Stifel has reiterated a Buy rating on Texas Instruments (NASDAQ:TXN) shares and kept a $250 price target as the chipmaker prepares to report quarterly results. The firm projects revenue slightly above its $4.50 billion estimate, representing a 1.7% sequential rise, and sees GAAP earnings per share at $1.35.
In its assessment, Stifel pointed to March ISM data showing a Production Index reading of 55.1% as a favorable signal ahead of the print. The firm also singled out the aerospace and defense end market for exhibiting notable strength within the broader industrial recovery, a trend Stifel sees as relevant to Texas Instruments’ demand picture.
Looking toward the second quarter of fiscal 2026, Stifel believes management could guide revenue above the current consensus of $4.86 billion, which would imply a 7.5% quarter-over-quarter increase. Stifel’s own estimate of $4.82 billion reflects a 7.0% sequential gain and contrasts with a five-year seasonal average increase of 6.0% - indicating an expectation of outperformance versus historical seasonality.
The firm is attentive to management commentary that could reinforce its "Return of Analog" thesis for calendar year 2026, noting that recovery signs appear to be broad-based across the company’s core end markets. Stifel emphasized several structural factors in its valuation case, including Texas Instruments’ pivot to lower capital expenditures, an anticipated inflection in free cash flow, and the scaling of capacity.
Stifel’s $250 price target is calculated using a 26.0 times calendar year 2027 price-to-free cash flow multiple. The firm’s stance centers on expected near-term revenue upside, supportive industrial indicators, and the company’s financial and operational posture that could drive improved cash generation.
Clear summary - Stifel maintains a Buy rating and a $250 target on Texas Instruments, forecasting revenue modestly above $4.50 billion and GAAP EPS of $1.35, and citing production data, aerospace and defense strength, and structural cash-flow improvements as supportive factors.
Key points
- Stifel expects slightly higher-than-estimated revenue in the upcoming quarter - 1.7% sequential growth versus its $4.50 billion base estimate.
- Potential second-quarter 2026 revenue guidance could top the $4.86 billion consensus, with Stifel modeling $4.82 billion (7.0% sequential growth) versus a five-year seasonal average of 6.0%.
- Noted strength in aerospace and defense and a Production Index reading of 55.1% in March as positive indicators for demand across industrial end markets.
Risks and uncertainties
- Management commentary may not support Stifel’s "Return of Analog" view for calendar year 2026 - impacts the semiconductor and industrial sectors.
- Revenue and margin outcomes could fall short of Stifel’s estimates, which would affect expectations for free cash flow and valuation - relevant to investors focused on cash flow multiples.
- Broader industrial demand may not sustain the strength seen in aerospace and defense, creating uncertainty for recovery breadth across core end markets.