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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 at $94.48 in the latest trading session, marking a +1.08% move from the prior day. The stock outpaced the S&P 500's daily loss of 0.15%. At the same time, the Dow lost 0.4%, and the tech-heavy Nasdaq 0%.

Coming into today, shares of the chipmaker had lost 5.99% in the past month. In that same time, the Computer and Technology sector lost 5.26%, while the S&P 500 lost 1.27%.

TXN will be looking to display strength as it nears its next earnings release, which is expected to be January 22, 2019. In that report, analysts expect TXN to post earnings of $1.24 per share. This would mark year-over-year growth of 13.76%. Meanwhile, the Zacks Consensus Estimate for revenue is projecting net sales of $3.75 billion, up 0.04% from the year-ago period.

Looking at the full year, our Zacks Consensus Estimates suggest analysts are expecting earnings of $5.56 per share and revenue of $15.82 billion. These totals would mark changes of +29.91% and +5.76%, respectively, from last year.

Investors should also note any recent changes to analyst estimates for TXN. These revisions help to show the ever-changing nature of near-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.

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. Over the past month, the Zacks Consensus EPS estimate has moved 1.49% lower. TXN is currently sporting a Zacks Rank of #5 (Strong Sell).

Digging into valuation, TXN currently has a Forward P/E ratio of 16.82. Its industry sports an average Forward P/E of 12.18, so we one might conclude that TXN is trading at a premium comparatively.

Also, we should mention that TXN has a PEG ratio of 1.77. 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. TXN's industry had an average PEG ratio of 1.77 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 180, putting it in the bottom 30% 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.

You can find more information on all of these metrics, and much more, on Zacks.com.


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