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

Zacks Equity Research
·3 min read

Texas Instruments (TXN) closed the most recent trading day at $162.10, moving -0.17% from the previous trading session. This change lagged the S&P 500's daily gain of 0.18%. Meanwhile, the Dow lost 0.15%, and the Nasdaq, a tech-heavy index, added 0.5%.

Coming into today, shares of the chipmaker had gained 4.42% in the past month. In that same time, the Computer and Technology sector gained 5.57%, while the S&P 500 gained 3.22%.

Investors will be hoping for strength from TXN as it approaches its next earnings release. In that report, analysts expect TXN to post earnings of $1.32 per share. This would mark year-over-year growth of 17.86%. Our most recent consensus estimate is calling for quarterly revenue of $3.58 billion, up 6.88% from the year-ago period.

For the full year, our Zacks Consensus Estimates are projecting earnings of $5.47 per share and revenue of $13.97 billion, which would represent changes of +4.39% and -2.89%, respectively, from the prior year.

It is also important to note the recent changes to analyst estimates for TXN. These revisions help to show the ever-changing nature of near-term business trends. As such, positive estimate revisions reflect analyst optimism about the company's business and profitability.

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. Over the past month, the Zacks Consensus EPS estimate has moved 0.09% higher. TXN is holding a Zacks Rank of #2 (Buy) right now.

Investors should also note TXN's current valuation metrics, including its Forward P/E ratio of 29.69. For comparison, its industry has an average Forward P/E of 27.99, which means TXN is trading at a premium to the group.

It is also worth noting that TXN currently has a PEG ratio of 3.18. 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. The Semiconductor - General industry currently had an average PEG ratio of 3.11 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 200, putting it in the bottom 22% 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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