Navigating Market Uncertainty: Intrinsic Value of Texas Instruments Inc

Core Viewpoint - Texas Instruments Inc is currently considered modestly overvalued based on its intrinsic value calculated through the Discounted Earnings model, which is $142.95 compared to its trading price of $202.71, resulting in a margin of safety of -41.8% [1] DCF Analysis - The GuruFocus DCF calculator utilizes EPS without NRI as the basis for its model, as historical data indicates a stronger correlation between stock prices and earnings than with free cash flow [2] - The DCF model follows a two-stage approach, consisting of a Growth Stage with a growth rate of 15.50% over 10 years, and a Terminal Stage with a growth rate of 4% over another 10 years [3][4] - The intrinsic value derived from the DCF (Earnings Based) model is $142.95, calculated from a Growth Stage value of $70.69 and a Terminal Stage value of $59.73 [4] Discount Rate and Assumptions - The discount rate used in the analysis is 11%, derived from the current 10-year Treasury rate of 4.01% plus a 6% risk premium [3] - The EPS without NRI is reported at $5.64, which is a critical input for the DCF calculation [2] Alternative Valuation - The DCF intrinsic value based on free cash flow is significantly lower at $20.35, indicating that Texas Instruments Inc is substantially overvalued with a margin of safety of -896.12% [5]