The calculations below outline how an intrinsic value for Texas Instruments is arrived at by discounting future cash flows to their present value. We use analyst's estimates of cash flows going forward 5 years.
See our documentation to learn about this calculation.
|Levered FCF (USD, Millions)||$4,113.09||$4,372.74||$4,753.85||$4,861.17||$4,970.92|
|Source||Analyst x14||Analyst x14||Analyst x2||Extrapolated @ (2.26%)||Extrapolated @ (2.26%)|
Discounted (@ 8.9%)
Present value of next 5 years cash flows:
Terminal Value = FCF2021 × (1 + g) ÷ (Discount Rate – g)
Terminal Value = $4,971 × (1 + 2.3%) ÷ (8.89% – 2.3%)
Terminal value based on the Perpetuity Method where growth (g) = 2.3%:
Present value of terminal value:
Equity Value (Total value) = Present value of next 5 years cash flows + terminal value
Value = Total value / Shares Outstanding ($68,459 / 996)
Value per share:
Current discount (share price of $81.12): -18%
The discount rate, or required rate of return, is estimated by calculating the Cost of Equity.
Discount rate = Cost of Equity = Risk Free Rate + (Levered Beta * Equity Risk Premium)
Discount rate = 8.89% = 2.33% + (0.856 * 7.67%)
The Levered Beta is the Unlevered Beta adjusted for financial leverage. It is limited to 0.8 to 2.0 (practical range for a stable firm).
Levered Beta = Unlevered beta (1 + (1- tax rate) (Debt/Equity))
0.856 = 0.832 (1 + (1- 30%) (4.15%))
Levered Beta used in calculation = 0.856
Are Texas Instruments's annual earnings growth expected to exceed 3.4% over the next 3 years?
Mr. Richard K. Templeton, also known as Rich, has been the Chief Executive Officer and President of Texas Instruments Inc. since May 2004. Mr. Templeton joined Texas Instruments Inc. in 1980 in the Semiconductor Group's sales and marketing organization and served as its Chief Operating Officer from 2000 to April 2004, Executive Vice President and President of Semiconductor division since 1996 and Senior Vice President since 1994. Mr. Templeton served as the President of Texas Instruments Inc. from May 2004 to April 2013. He served as a Texas Instruments Inc.'s Vice President since 1991 and was promoted to manager of worldwide application specific products in 1993, with responsibility for a wide range of products including digital signal processors. He has been the Chairman of Texas Instruments Inc. since April 17, 2008. He served as the Chairman of Semiconductor Industry Association. He has been an Executive Director of Texas Instruments Inc. since July 2003. He serves as a Director of Semiconductor Industry Association. He serves as a Director of Catalyst, Inc. He holds a Bachelors Degree in Electrical Engineering from Union College.
Average tenure of the Texas Instruments management team:
Average tenure of the Texas Instruments board of directors:
Texas Instruments Incorporated designs, manufactures, and sells semiconductors to electronics designers and manufacturers worldwide. The company operates through two segments, Analog and Embedded Processing. The Analog segment offers high volume analog and logic products for automotive safety devices, touch screen controllers, low voltage motor drivers, and integrated motor controllers; and power products to manage power requirements using battery management solutions, portable power components, power supply controls, and point-of-load products. This segment also provides high performance analog products, such as high-speed data converters, amplifiers, sensors, high reliability products, interface products, and precision products; and silicon valley analog products, including power management, data converter, interface, and operational amplifier products that are used in manufacturing various electronic systems. The Embedded Processing segment offers processors, including digital signal processors and applications processors; microcontrollers, such as self-contained systems with a processor core, memory, and peripherals that are designed to control a set of specific tasks for electronic equipment; and connectivity products that enable electronic equipment to connect and transfer data wirelessly. It also provides DLP products primarily used in projectors to create high-definition images; calculators; and application-specific integrated circuits. The company markets and sells its semiconductor products through direct sales and distributors, as well as online. Texas Instruments Incorporated was founded in 1930 and is headquartered in Dallas, Texas.
|Name:||Texas Instruments Incorporated|
|Market Cap:||$80,822 million|
12500 TI Boulevard, Dallas, 75243, United States
|Sector:||Semiconductors and Semiconductor Equipment|