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

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Texas Instruments (TXN - Free Report) closed the most recent trading day at $155.92, moving +1.19% from the previous trading session. This change lagged the S&P 500's 1.46% gain on the day. Meanwhile, the Dow gained 1%, and the Nasdaq, a tech-heavy index, lost 0.17%.

Prior to today's trading, shares of the chipmaker had lost 11.94% over the past month. This has lagged the Computer and Technology sector's loss of 7.96% and the S&P 500's loss of 6.94% in that time.

Investors will be hoping for strength from Texas Instruments as it approaches its next earnings release. The company is expected to report EPS of $2.07, up 0.98% from the prior-year quarter. Meanwhile, the Zacks Consensus Estimate for revenue is projecting net sales of $4.53 billion, down 1.09% from the year-ago period.

TXN's full-year Zacks Consensus Estimates are calling for earnings of $8.74 per share and revenue of $18.97 billion. These results would represent year-over-year changes of +5.81% and +3.42%, respectively.

It is also important to note the recent changes to analyst estimates for Texas Instruments. Recent revisions tend to reflect the latest 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. 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.

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. The Zacks Consensus EPS estimate remained stagnant within the past month. Texas Instruments currently has a Zacks Rank of #3 (Hold).

Investors should also note Texas Instruments's current valuation metrics, including its Forward P/E ratio of 17.63. Its industry sports an average Forward P/E of 10.83, so we one might conclude that Texas Instruments is trading at a premium comparatively.

We can also see that TXN currently has a PEG ratio of 1.89. 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. TXN's industry had an average PEG ratio of 1.83 as of yesterday's close.

The Semiconductor - General industry is part of the Computer and Technology sector. This industry currently has a Zacks Industry Rank of 171, which puts it in the bottom 33% of all 250+ industries.

The Zacks Industry Rank includes is listed in order from best to worst in terms of the average Zacks Rank of the individual companies within each of these sectors. Our research shows that the top 50% rated industries outperform the bottom half by a factor of 2 to 1.

To follow TXN in the coming trading sessions, be sure to utilize Zacks.com.


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