Texas Instruments logged a 0.1% change during today's afternoon session, and is now trading at a price of $182.26 per share. The S&P 500 index moved 1.4% and the Nasdaq posted a 3.2% change.
Texas Instruments shares moved 3.7% over the last 52 weeks, with a high of $191.34 and a low of $144.46. During this time, the stock outperformed the S&P 500 index by 11.7%. As of January 2022, the company's 50-day average price is $173.0. Texas Instruments Incorporated designs, manufactures, and sells semiconductors to electronics designers and manufacturers worldwide. The large-cap Technology company is based in Dallas, TX. Texas Instruments has returned a 2.6% dividend yield over the last 12 months.
Exceptional EPS Growth with Low Leverage Levels:
| 2019-12-31 | 2020-12-31 | 2021-12-31 | 2022-12-31 | |
|---|---|---|---|---|
| Revenue (MM) | $14,383 | $14,461 | $18,344 | $20,028 |
| Revenue Growth | n/a | 0.54% | 26.85% | 9.18% |
| Gross Margins | 63.7% | 64.1% | 67.5% | 68.8% |
| Gross Margins Growth | n/a | 0.63% | 5.3% | 1.93% |
| Operating Margins | 41.5% | 42.3% | 49.9% | 51.9% |
| Operating Margins Growth | n/a | 1.93% | 17.97% | 4.01% |
| Earnings Per Share | $5.24 | $5.97 | $8.26 | $9.41 |
| EPS Growth | n/a | 13.93% | 38.36% | 13.92% |
| Free Cash Flow (MM) | $5,802 | $5,490 | $6,294 | $5,923 |
| FCF Growth | n/a | -5.38% | 14.64% | -5.89% |
| Capital Expenditures (MM) | -$847 | -$649 | -$2,462 | -$2,797 |
| Net Debt / EBITDA | 0.47 | 0.5 | 0.3 | 0.5 |
Texas Instruments Is Reasonably Priced:
Compared to the Technology sector's average of 26.5, Texas Instruments has a trailing twelve month P/E ratio of 19.4 and, according to its EPS guidance of 8.47, an expected P/E ratio of 21.5. Texas Instruments's PEG ratio is 1.38 based on its 14.0% annual average growth rate of historical and projected earnings per share. However, we believe that it is more prudent to calculate the PEG ratio using the broader market's 5-year expected EPS growth rate of 13.05%, because the growth rate implied by Texas Instruments's past and expected EPS is probably not sustainable. This more prudent approach shows a PEG ratio of 1.48, which implies that the company's shares might in fact be fairly valued.
Texas Instruments's P/B ratio is 11.3 compared to its sector average of 5.57. The company is likely overvalued in terms of its equity. The company's shares are currently trading 256.5% above their fair value as expressed by Benjamin Graham's formula:
√(22.5 * 4-year average EPS * book value per share) = √(22.5 * 7.22 * 16.089) = $51.12
Texas Instruments's elevated P/B ratio notwithstanding, the company's strong cash flows, decent earnings multiple, and healthy debt levels factor towards it being fairly valued.
Texas Instruments Is the Subject of Mixed Market Indicators:
29 analysts are following Texas Instruments and have set target prices ranging from $127 to $230 per share. On average, they have given the company a rating of hold. At the current price of $182.26, TXN is trading -0.22% away from its average analyst target price of $182.66 per share, implying an analyst consensus of some upside potential for the stock.
The company has an average amount of shares sold short since 2.2% of the company's shares are tied to short positions. Institutions own 88.4% of Texas Instruments's shares, while the insider ownership rate stands at 0.21%. The biggest shareholder is the Vanguard Group, Inc. with a 10% stake in the company worth approximately $15,897,080,329.
