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Texas Instruments Incorporated (TXN) stock analysis

Texas Instruments rallies to 308.91, 7.52% below its high, as analog recovery meets a rich valuation

TXN closed at 308.91 on Oct 27, 2026, up 3.62% on the day and 11.21% over five days, after a third-quarter report with revenue growth of 27.69% year over year. The stock trades at a forward P/E of 26.61 (next year's consensus EPS basis) versus an industry median of 22.25, while analysts' mean target of 319.78 sits only 3.52% above the price.

  • Price: 308.91
  • Market Cap (USD): $282.34B
  • P/E: 39.69×
  • Fwd P/E: 26.61×
  • Div Yield: 1.84%
  • 1Y Return: 82.65%
  • Mean Target: 319.78
  • Rating: Buy

Bull case

  • Latest-quarter revenue grew 27.69% year over year, and revenue has risen for 3 straight quarters, from 4.42B in Q4 FY2025 to 6.05B in Q3 FY2026.
  • Operating margin is 40.76%, up 6.44% over the past year, and ROIC is 27.19% versus a sector median of 15.21%.
  • Free cash flow over the trailing twelve months is 7.32B (FCF growth 251.83%), and Q3 EPS of 2.62 beat consensus of 2.44 by 7.38%.

Bear case

  • Valuation is rich: trailing P/E is 39.69, price to sales is 13.60 (78th percentile of US Technology), and the FCF yield is 2.59%.
  • The shares are overbought short-term, with a 14-day RSI of 69.98, 2-day RSI of 96.54 and price 19.78% above the 200-day average, and the stock reacted only 0.62% to the Oct 21 earnings report.
  • Analysts are split: 32 Buy, 28 Hold and 6 Sell as of Oct 28, 2026. Goldman Sachs (Sell, target 250) and Morgan Stanley (Underweight, target 278) sit below the current price.

What to watch

  • Ex-dividend date Oct 30, 2026 for the 1.52 quarterly dividend, paid Nov 10, 2026.
  • Next earnings date Jan 26, 2027, with consensus EPS of 2.62.
  • 52-week and all-time high of 334.03, versus the 20-day low of 272.01 and 20-day high of 309.47.
  • 200-day average at 257.90 and 50-day average at 273.30 as support references.

General

Texas Instruments designs and sells semiconductors, mainly analog and embedded processing chips. Revenue and margins are recovering sharply, and the stock has gained 82.65% over one year. Valuation is above sector medians and analysts are divided.

Business and momentum

Per the profile, TI designs, manufactures and sells semiconductors to electronics designers and manufacturers. Analog made up 79.21% of fiscal 2025 revenue and Embedded Processing 15.25%. Trailing revenue is 20.77B with 20.27% year-over-year growth, and Q3 FY2026 revenue was 6.05B.

Valuation in context

Forward P/E is 26.61 on next year's consensus EPS basis, in the 67th percentile of US Technology (median 21.60) and 19.60% above the industry median of 22.25. The PEG ratio is 0.94. Dividend yield is 1.84%, in the 89th percentile of peers.

What analysts and markets signal

The consensus label is Buy with a mean target of 319.78 from 9 targets in the last 3 months, 3.52% above the price. After the Oct 21 report, Jefferies raised its target to 300 from 260 and Barclays to 280 from 250. UBS (360) and Stifel (370) are well above the price.

Long-term investor

The multi-year picture is a deep downturn followed by a sharp recovery. Returns on capital and margins are strong, and the balance sheet is sound, but 3-year growth rates are still negative and the valuation is not cheap.

Growth durability

Revenue fell from 20.03B in fiscal 2022 to 15.64B in fiscal 2024, then rose to 17.68B in fiscal 2025. The 3-year revenue CAGR is -4.07% and the 5-year is 4.10%. Quarterly revenue has risen for 3 straight quarters, and next-year EPS growth is forecast at 28.43%.

Margins, returns and balance sheet

Gross margin is 60.24% and operating margin 40.76%. ROIC is 27.19% and ROE 39.72%. Net debt is 5.41B, or 0.52 times EBITDA, with interest coverage of 15.01. TI priced $2.0 billion of notes on Oct 27, 2026, which adds to debt.

Cash returns and ownership

Dividends have grown for 22 years; the next quarterly payout is 1.52 versus 1.42, though the payout ratio is 73.58%. Fiscal 2025 buybacks were 1.48B against 5.00B in dividends. Institutions hold 92.02%. Insiders made 2 sales and no buys in 90 days, a net -1.9M.

Swing trader

The trend is firmly up, with the price above all key averages and a 20-day high set on Oct 27. Short-term indicators are stretched, so the setup depends on whether the stock holds above its recent breakout area.

Trend and momentum

Price of 308.91 is above the 20-day (286.19), 50-day (273.30) and 200-day (257.90) averages. The golden cross dated Feb 4, 2026 remains in place. RSI is 69.98, MACD 4.85 is above its signal at 3.21, but ADX is only 17.28, suggesting a weak trend despite the move.

Recent sessions and levels

The stock rose 3.62% on Oct 27 on 8.0M shares and 1.22 times relative volume, after 298.12 on Oct 26. Nearby levels are the 20-day high of 309.47, the 20-day low of 272.01 and the 52-week high of 334.03. Stochastic K is 98.51 and the close is above the upper Bollinger band at 303.00.

Risk and flow

ATR is 9.69, or 3.14% of price. Short interest was 20.2M shares, 2.21% of float, on Oct 15, 2026, down 1.06%. No upgrades or downgrades occurred in 30 days. Ex-dividend is Oct 30; the next earnings report on Jan 26, 2027 falls outside near-term holding windows.

Options

Implied volatility is moderate relative to its own history but above realized volatility, so premium is somewhat rich. The term structure is flat and liquidity scores well. The next earnings date falls outside the 30-day expiry.

Implied volatility level

The 30-day IV is 38.89%, with a 52-week rank of 24 and percentile of 44, against a range of 27.35% to 74.46%. IV fell 10.2 points over five days after earnings. The term structure is flat, with 60- and 90-day IV at 38.49%, and the 25-delta skew is -6.5 points.

Implied versus realized

The 30-day IV is 1.28 times the 30-day historical volatility of 30.40%, an 8.5-point spread. The volatility risk premium is +5.1 points. Premium is rich relative to realized volatility. The expected 30-day move is 11.15% (34.44), and the 7-day move is 5.39%.

Earnings history, yield and liquidity

Average earnings move over 4 quarters is 8.45%, with a maximum of 21.05% over 8 quarters; the Oct 21 implied move was 9.54% versus an actual 0.62%. For the Nov 27, 2026 expiry, the 30-delta put at 290.00 pays 19.40 and the 30-delta call at 325.00 pays 6.67; an ex-dividend date falls before expiry. Liquidity score is 87; put/call volume is 0.73.

Analysis written October 28, 2026 from Qanvo data as of October 27, 2026. AI-generated, for information only; not investment advice.