Texas Instruments (TXN) Gains But Lags Market: What You Should Know
Texas Instruments (TXN) closed at $178.47 in the latest trading session, marking a +1.21% move from the prior day. The stock lagged the S&P 500's daily gain of 1.24%. Meanwhile, the Dow gained 1.23%, and the Nasdaq, a tech-heavy index, added 0.15%.
Coming into today, shares of the chipmaker had gained 4.81% in the past month. In that same time, the Computer and Technology sector lost 5.9%, while the S&P 500 lost 2.45%.
Texas Instruments will be looking to display strength as it nears 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%. Meanwhile, the Zacks Consensus Estimate for revenue is projecting net sales of $4.71 billion, up 9.93% from the year-ago period.
For the full year, our Zacks Consensus Estimates are projecting earnings of $9.09 per share and revenue of $19.91 billion, which would represent changes of +10.05% and +8.51%, respectively, from the prior year.
Investors should also note any recent changes to analyst estimates for Texas Instruments. These recent revisions tend to reflect the evolving nature of short-term business trends. With this in mind, we can consider positive estimate revisions a sign of optimism about 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.
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).
Valuation is also important, so investors should note that Texas Instruments has a Forward P/E ratio of 19.39 right now. This represents a premium compared to its industry's average Forward P/E of 13.41.
Meanwhile, TXN's PEG ratio is currently 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 industry currently had an average PEG ratio of 2.34 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 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.
You can find more information on all of these metrics, and much more, on Zacks.com.
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