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

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Texas Instruments (TXN - Free Report) closed the most recent trading day at $193.07, moving -0.93% from the previous trading session. This move lagged the S&P 500's daily gain of 0.16%.

Heading into today, shares of the chipmaker had gained 2.08% over the past month, outpacing the Computer and Technology sector's loss of 4.96% and the S&P 500's loss of 3.32% in that time.

Wall Street will be looking for positivity from TXN as it approaches its next earnings report date. On that day, TXN is projected to report earnings of $2.04 per share, which would represent year-over-year growth of 40.69%. 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.

It is also important to note the recent changes to analyst estimates for TXN. Recent revisions tend to reflect the latest 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. We developed the Zacks Rank to capitalize on this phenomenon. Our system takes these estimate changes into account and delivers a clear, actionable rating model.

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 remained stagnant. TXN currently has a Zacks Rank of #3 (Hold).

Investors should also note TXN's current valuation metrics, including its Forward P/E ratio of 24.8. Its industry sports an average Forward P/E of 22.37, so we one might conclude that TXN is trading at a premium comparatively.

We can also see that TXN currently has a PEG ratio of 2.66. The PEG ratio is similar to the widely-used P/E ratio, but this metric also takes the company's expected earnings growth rate into account. The Semiconductor - General was holding an average PEG ratio of 2.59 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 51, putting it in the top 21% 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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