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

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In the latest trading session, Texas Instruments (TXN - Free Report) closed at $188.09, marking a +0.14% move from the previous day. This move lagged the S&P 500's daily gain of 0.22%.

Coming into today, shares of the chipmaker had gained 1.45% in the past month. In that same time, the Computer and Technology sector gained 2.07%, while the S&P 500 gained 1.86%.

TXN will be looking to display strength as it nears its next earnings release. The company is expected to report EPS of $2.04, up 40.69% from the prior-year quarter. Meanwhile, the Zacks Consensus Estimate for revenue is projecting net sales of $4.65 billion, up 21.73% from the year-ago period.

For the full year, our Zacks Consensus Estimates are projecting earnings of $7.86 per share and revenue of $17.94 billion, which would represent changes of +31.66% and +24.05%, respectively, from the prior year.

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 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.

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. The Zacks Consensus EPS estimate has moved 0.14% higher within the past month. TXN is currently sporting a Zacks Rank of #2 (Buy).

Looking at its valuation, TXN is holding a Forward P/E ratio of 23.9. Its industry sports an average Forward P/E of 21.71, so we one might conclude that TXN is trading at a premium comparatively.

Also, we should mention that TXN has a PEG ratio of 2.56. 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 was holding an average PEG ratio of 2.56 at yesterday's closing price.

The Semiconductor - General industry is part of the Computer and Technology sector. This group has a Zacks Industry Rank of 39, putting it in the top 16% 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.

Be sure to follow all of these stock-moving metrics, and many more, on Zacks.com.


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