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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 $171.31 in the latest trading session, marking a +0.09% move from the prior day. This change outpaced the S&P 500's 0.66% loss on the day. Elsewhere, the Dow lost 0.29%, while the tech-heavy Nasdaq lost 1.25%.

Coming into today, shares of the chipmaker had gained 5.65% in the past month. In that same time, the Computer and Technology sector gained 3.38%, while the S&P 500 gained 3.42%.

TXN will be looking to display strength as it nears its next earnings release, which is expected to be January 26, 2021. The company is expected to report EPS of $1.34, up 19.64% from the prior-year quarter. Meanwhile, the Zacks Consensus Estimate for revenue is projecting net sales of $3.61 billion, up 7.65% from the year-ago period.

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 such, positive estimate revisions reflect analyst optimism about the company's business and profitability.

Our research shows that these estimate changes are directly correlated with near-term stock prices. 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 1.33% higher. TXN is currently sporting a Zacks Rank of #3 (Hold).

Investors should also note TXN's current valuation metrics, including its Forward P/E ratio of 28.94. This represents a premium compared to its industry's average Forward P/E of 25.62.

Also, we should mention that TXN has a PEG ratio of 3.1. 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. Semiconductor - General stocks are, on average, holding a PEG ratio of 3.05 based on yesterday's closing prices.

The Semiconductor - General industry is part of the Computer and Technology sector. This industry currently has a Zacks Industry Rank of 220, which puts it in the bottom 14% 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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