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Texas Instruments (TXN) Outpaces Stock Market Gains: What You Should Know

Zacks Equity Research
·3 mins read

Texas Instruments (TXN) closed at $138.65 in the latest trading session, marking a +1.22% move from the prior day. This move outpaced the S&P 500's daily gain of 1.05%. Meanwhile, the Dow gained 0.52%, and the Nasdaq, a tech-heavy index, added 1.72%.

Prior to today's trading, shares of the chipmaker had lost 2.86% over the past month. This has was narrower than the Computer and Technology sector's loss of 4.28% and the S&P 500's loss of 3.29% in that time.

Wall Street will be looking for positivity from TXN as it approaches its next earnings report date. The company is expected to report EPS of $1.25, down 16.11% from the prior-year quarter. Meanwhile, our latest consensus estimate is calling for revenue of $3.41 billion, down 9.5% from the prior-year quarter.

For the full year, our Zacks Consensus Estimates are projecting earnings of $5.05 per share and revenue of $13.26 billion, which would represent changes of -3.63% and -7.8%, respectively, from the prior year.

It is also important to note the recent changes to analyst estimates for TXN. These revisions typically reflect the latest short-term business trends, which can change frequently. As a result, we can interpret positive estimate revisions as a good sign for the company's business outlook.

Research indicates that these estimate revisions are directly correlated with near-term share price momentum. Investors can capitalize on this by using the Zacks Rank. This model considers these estimate changes and provides a simple, actionable rating system.

Ranging from #1 (Strong Buy) to #5 (Strong Sell), the Zacks Rank system has a proven, outside-audited track record of outperformance, with #1 stocks returning an average of +25% annually since 1988. Within the past 30 days, our consensus EPS projection remained stagnant. TXN is currently sporting a Zacks Rank of #3 (Hold).

Digging into valuation, TXN currently has a Forward P/E ratio of 27.11. Its industry sports an average Forward P/E of 27.11, so we one might conclude that TXN is trading at a no noticeable deviation comparatively.

Also, we should mention that TXN has a PEG ratio of 2.9. The PEG ratio is similar to the widely-used P/E ratio, but this metric also takes the company's expected earnings growth rate into account. Semiconductor - General stocks are, on average, holding a PEG ratio of 2.97 based on yesterday's closing prices.

The Semiconductor - General industry is part of the Computer and Technology sector. This industry currently has a Zacks Industry Rank of 236, which puts it in the bottom 8% of all 250+ industries.

The Zacks Industry Rank gauges the strength of our individual industry groups by measuring the average Zacks Rank of the individual stocks within the groups. Our research shows that the top 50% rated industries outperform the bottom half by a factor of 2 to 1.

Be sure to follow all of these stock-moving metrics, and many more, on Zacks.com.


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