The activist is urging Texas Instruments to improve its free cash flow by adapting a less rigid plan for capital expenditures.
Citing the reduction of free cash flow from $6.40 a share in 2022 to an expected $1.83 a share this year Elliott maintains that TI has alienated investors who might otherwise gravitate to its dominant position in serving the automotive and industrial complexes with analog chips. Its stock price, Elliott insists, has suffered as a result, trailing its peer group by substantial margins over the last two, four, six and ten year periods.
The problem, Elliott maintains, is that a reversal in the cycle of demand for TI's chips since the plan was put in place will result in capacity levels that are "50% above consensus revenue expectations in 2026 and 2030."