UPDATE: RBC Upgrades Texas Instruments

RBC on Monday upgraded Texas Instruments (NASDAQ: TXN) to Outperform based on a mix-shift that could accelerate free cash flow growth.

RBC analyst Doug Freedman stated, "TXN is likely to benefit from positive mix-shifts, which should lift both gross margins and FCFs. The company has been laser focused on its capital management strategy, and we believe TXN delivers FCFs at the upper-end of its 20-30% of revenues range (RBCe: CY15/29%, CY16/28%)."

Freedman suspects that TXN is "benefiting more from unit growth and mix shift vs. pricing power, which is driving revenue/GM upside as utilizations remain low (high-70% range)."

Lastly, Freedman says, "Our higher applied P/FCF multiple of 15.0x (prior 12.8x) reflects the positive foreseeable impact of richer product mix ahead."

Texas Instruments was trading up $0.74 from the previous close of $44.99 to $45.73 at last check.