Texas Instruments (TXN) Capital Management Event Overview

February 3, 2022 8:11 a.m. EST


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BofA Securities analyst Vivek Arya reiterated a buy rating and $225.00 price target on Texas Instruments (NASDAQ:TXN) ahead of the company’s capital management update. 3 areas of focus for investors should be:
1) is justified aggressive capex when we are late in the cycle (remember that capex is not equal to capacity)

2) how much will TXN be spending on its aggressive fab expansion plans (we see $3-3.5 billion per year, 14-15% of sales)

3) what will be the resulting headwind for GM (200-300 basis points on the other hand), the FCF and therefore the return capacity of the FCF (low/no expectation of reaccelerating redemptions in the short term)?

The analyst said: “While TXN stock has held up better year-to-date (-4% vs. SOX -11%), it has lagged significantly over the past year (+4% versus SOX +15%) due to a surprising reduction in buyout activity and 2H’ 21 HoH deceleration, but we expect tomorrow’s event to bring some clarity. recognizing GM’s headwinds, we believe investors may overlook the positive offsets from increased sales, pricing, mix (over 300mm, industrial/automotive) and potential tax benefits from US government relocations the incentives that support the FCF.”

For a summary of analyst ratings and rating history on Texas Instruments, click here. For more information on Texas Instruments’ rankings, click here.

Shares of Texas Instruments closed at $187.84 yesterday.


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