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Texas Instruments (TXN) Dips More Than Broader Markets: What You Should Know

Zacks Equity Research
HEXO (HEXO) closed at $6.86 in the latest trading session, marking a -1.86% move from the prior day.

In the latest trading session, Texas Instruments (TXN) closed at $102.68, marking a -1.66% move from the previous day. This change lagged the S&P 500's daily loss of 0.79%. Meanwhile, the Dow lost 0.85%, and the Nasdaq, a tech-heavy index, lost 1.11%.

Coming into today, shares of the chipmaker had gained 11.3% in the past month. In that same time, the Computer and Technology sector gained 12.9%, while the S&P 500 gained 13.44%.

Investors will be hoping for strength from TXN as it approaches its next earnings release, which is expected to be April 23, 2019. In that report, analysts expect TXN to post earnings of $1.13 per share. This would mark a year-over-year decline of 6.61%. Meanwhile, our latest consensus estimate is calling for revenue of $3.48 billion, down 8.16% from the prior-year quarter.

For the full year, our Zacks Consensus Estimates are projecting earnings of $5.27 per share and revenue of $15.04 billion, which would represent changes of -5.72% and -4.71%, respectively, from the prior year.

Any recent changes to analyst estimates for TXN should also be noted by investors. These revisions help to show the ever-changing nature of near-term business trends. As a result, we can interpret positive estimate revisions as a good sign for the company's business outlook.

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 has moved 2.9% lower within the past month. TXN currently has a Zacks Rank of #4 (Sell).

Looking at its valuation, TXN is holding a Forward P/E ratio of 19.8. Its industry sports an average Forward P/E of 14.43, so we one might conclude that TXN is trading at a premium comparatively.

It is also worth noting that TXN currently has a PEG ratio of 2.08. This metric is used similarly to the famous P/E ratio, but the PEG ratio also takes into account the stock's expected earnings growth rate. The Semiconductor - General was holding an average PEG ratio of 2.07 at yesterday's closing price.

The Semiconductor - General industry is part of the Computer and Technology sector. This group has a Zacks Industry Rank of 246, putting it in the bottom 4% 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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