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

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Texas Instruments (TXN - Free Report) closed at $190.75 in the latest trading session, marking a +0.93% move from the prior day. The stock outpaced the S&P 500's daily gain of 0.15%.

Coming into today, shares of the chipmaker had gained 5.57% in the past month. In that same time, the Computer and Technology sector lost 0.49%, while the S&P 500 gained 0.58%.

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 $1.81, up 22.3% from the prior-year quarter. Our most recent consensus estimate is calling for quarterly revenue of $4.32 billion, up 33.32% from the year-ago period.

For the full year, our Zacks Consensus Estimates are projecting earnings of $7.39 per share and revenue of $17.4 billion, which would represent changes of +23.79% and +20.3%, respectively, from the prior year.

It is also important to note the recent changes to analyst estimates for TXN. Recent revisions tend to reflect the latest near-term business trends. With this in mind, we can consider positive estimate revisions a sign of optimism about the company's business outlook.

Our research shows that these estimate changes are directly correlated with near-term stock prices. 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 has moved 0.44% higher. TXN is holding a Zacks Rank of #2 (Buy) right now.

Looking at its valuation, TXN is holding a Forward P/E ratio of 25.57. For comparison, its industry has an average Forward P/E of 22.57, which means TXN is trading at a premium to the group.

Also, we should mention that TXN has a PEG ratio of 2.74. This popular metric is similar to the widely-known P/E ratio, with the difference being that the PEG ratio also takes into account the company's expected earnings growth rate. Semiconductor - General stocks are, on average, holding a PEG ratio of 2.34 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 132, which puts it in the bottom 49% of all 250+ industries.

The Zacks Industry Rank gauges the strength of our 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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