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Texas Instruments (TXN) Gains As Market Dips: What You Should Know

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Texas Instruments (TXN - Free Report) closed the most recent trading day at $167.80, moving +1.6% from the previous trading session. The stock outpaced the S&P 500's daily loss of 0.2%. Meanwhile, the Dow lost 0.14%, and the Nasdaq, a tech-heavy index, lost 0.12%.

Prior to today's trading, shares of the chipmaker had gained 1.26% over the past month. This has outpaced the Computer and Technology sector's loss of 4.64% and the S&P 500's loss of 3.29% in that time.

Investors will be hoping for strength from Texas Instruments as it approaches its next earnings release. The company is expected to report EPS of $2.37, up 14.49% from the prior-year quarter. Meanwhile, the Zacks Consensus Estimate for revenue is projecting net sales of $5.11 billion, up 10.16% from the year-ago period.

TXN's full-year Zacks Consensus Estimates are calling for earnings of $9.35 per share and revenue of $20.08 billion. These results would represent year-over-year changes of +13.2% and +9.44%, respectively.

Any recent changes to analyst estimates for Texas Instruments should also be noted by investors. Recent revisions tend to reflect the latest near-term business trends. As such, positive estimate revisions reflect analyst optimism about the company's business and profitability.

Our research shows that these estimate changes are directly correlated with near-term stock prices. We developed the Zacks Rank to capitalize on this phenomenon. Our system takes these estimate changes into account and delivers a clear, actionable rating model.

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. The Zacks Consensus EPS estimate remained stagnant within the past month. Texas Instruments is currently a Zacks Rank #3 (Hold).

Valuation is also important, so investors should note that Texas Instruments has a Forward P/E ratio of 17.66 right now. This valuation marks a premium compared to its industry's average Forward P/E of 9.23.

Investors should also note that TXN has a PEG ratio of 1.89 right now. 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. The Semiconductor - General was holding an average PEG ratio of 1.83 at yesterday's closing price.

The Semiconductor - General industry is part of the Computer and Technology sector. This industry currently has a Zacks Industry Rank of 233, which puts it in the bottom 8% 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.

To follow TXN in the coming trading sessions, be sure to utilize Zacks.com.


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