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Texas Instruments (TXN) Gains But Lags Market: What You Should Know

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Texas Instruments (TXN) closed the most recent trading day at $180.10, moving +0.91% from the previous trading session. This move lagged the S&P 500's daily gain of 1.17%. Elsewhere, the Dow gained 0.8%, while the tech-heavy Nasdaq added 0.18%.

Heading into today, shares of the chipmaker had gained 8.39% over the past month, outpacing the Computer and Technology sector's loss of 1.7% and the S&P 500's gain of 0.88% in that time.

Investors will be hoping for strength from Texas Instruments as it approaches its next earnings release. On that day, Texas Instruments is projected to report earnings of $2.17 per share, which would represent year-over-year growth of 16.04%. Our most recent consensus estimate is calling for quarterly revenue of $4.71 billion, up 9.93% from the year-ago period.

TXN's full-year Zacks Consensus Estimates are calling for earnings of $9.09 per share and revenue of $19.91 billion. These results would represent year-over-year changes of +10.05% and +8.51%, respectively.

Investors should also note any recent changes to analyst estimates for Texas Instruments. Recent revisions tend to reflect the latest near-term business trends. As a result, we can interpret positive estimate revisions as a good sign for the company's business outlook.

Based on our research, we believe these estimate revisions are directly related to near-team stock moves. Investors can capitalize on this by using the Zacks Rank. This model considers these estimate changes and provides a simple, actionable rating system.

The Zacks Rank system, which ranges from #1 (Strong Buy) to #5 (Strong Sell), has an impressive outside-audited track record of outperformance, with #1 stocks generating an average annual return of +25% since 1988. The Zacks Consensus EPS estimate remained stagnant within the past month. Texas Instruments is currently a Zacks Rank #1 (Strong Buy).

Looking at its valuation, Texas Instruments is holding a Forward P/E ratio of 19.63. This represents a premium compared to its industry's average Forward P/E of 13.48.

Also, we should mention that TXN has a PEG ratio of 2.1. 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 industry currently had an average PEG ratio of 2.36 as of yesterday's close.

The Semiconductor - General industry is part of the Computer and Technology sector. This group has a Zacks Industry Rank of 6, putting it in the top 3% of all 250+ industries.

The Zacks Industry Rank includes is listed in order from best to worst in terms of the average Zacks Rank of the individual companies within each of these sectors. 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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