TD Cowen increased its price target for Texas Instruments (NASDAQ:TXN) to $240.00 from $225.00 on Wednesday and left its rating at Buy. The revised target implies upside from TXN's then-current share price of $211.68, with the stock trading roughly 1% below its 52-week high of $221.69.
The research house attributed the target bump to Texas Instruments’ first-quarter 2026 guidance, which topped Street estimates and triggered an approximate 8% rally in the stock. TD Cowen highlighted the company’s implied first-quarter 2026 gross margin guide of about 57% as a key factor in the market's positive response. That figure aligns closely with Texas Instruments’ reported trailing twelve-month gross profit margin of 57.02%.
TD Cowen described demand for the firm’s products as gradually improving, noting that above-seasonal guidance was supported by strengthening bookings and a rising backlog. The firm further pointed to a company disclosure showing a 35% two-year compound annual growth rate in datacenter sales as evidence of improving end-market trends.
Despite the positive signs, TD Cowen cautioned that utilization rates may take time to expand meaningfully. Nevertheless, the firm offered a forward-looking valuation rationale: it expects Texas Instruments could generate more than $9 in free cash flow per share by 2027, a projection TD Cowen said underpins its higher target.
Following the company's update, TD Cowen raised its fiscal year 2026 and 2027 forecasts for Texas Instruments. The analyst noted that potential increases in utilization later in the year would strengthen confidence in a sustained improvement in demand.
Other brokerages moved in the same direction after the earnings report and guidance. KeyBanc raised its price target to $240 while maintaining an Overweight rating, citing robust industrial demand and datacenter growth. Cantor Fitzgerald lifted its target to $225 on unexpectedly strong quarterly results and favorable gross margin trends. Benchmark increased its target to $250 after the March quarter guidance exceeded expectations. Baird also raised its target to $225 based on an upbeat first-quarter outlook. UBS set the loftiest target at $260, pointing to improving revenue patterns and constructive backlog commentary, while also noting what it characterized as lackluster investor sentiment toward the company.
These analyst moves collectively reflect a market reassessment of Texas Instruments’ near-term performance and cash-generation prospects in light of the company’s guidance and margin outlook.
Summary - TD Cowen raised its TXN price target to $240 and retained a Buy rating after first-quarter 2026 guidance exceeded expectations, supported by a roughly 57% gross margin guide and improving bookings and backlog. The firm projects more than $9 in free cash flow per share by 2027 and has increased its fiscal 2026 and 2027 estimates.