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Texas Instruments (TXN) Laps the Stock Market: Here's Why

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The latest trading session saw Texas Instruments (TXN - Free Report) ending at $171.72, denoting a +0.29% adjustment from its last day's close. This change outpaced the S&P 500's 0.04% gain on the day. At the same time, the Dow added 0.14%, and the tech-heavy Nasdaq lost 0.03%.

Shares of the chipmaker have appreciated by 11.77% over the course of the past month, outperforming the Computer and Technology sector's gain of 4.9% and the S&P 500's gain of 5.28%.

Market participants will be closely following the financial results of Texas Instruments in its upcoming release. The company is predicted to post an EPS of $1.46, indicating a 31.46% decline compared to the equivalent quarter last year. At the same time, our most recent consensus estimate is projecting a revenue of $4.11 billion, reflecting a 11.92% fall from the equivalent quarter last year.

For the annual period, the Zacks Consensus Estimates anticipate earnings of $7.04 per share and a revenue of $17.56 billion, signifying shifts of -25.03% and -12.35%, respectively, from the last year.

Furthermore, it would be beneficial for investors to monitor any recent shifts in analyst projections for Texas Instruments. Such recent modifications usually signify the changing landscape of near-term business trends. As a result, upbeat changes in estimates indicate analysts' favorable outlook on the company's business health and profitability.

Our research reveals that these estimate alterations are directly linked with the stock price performance in the near future. To utilize this, we have created the Zacks Rank, a proprietary model that integrates these estimate changes and provides a functional 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 0.06% lower within the past month. Texas Instruments is currently a Zacks Rank #4 (Sell).

With respect to valuation, Texas Instruments is currently being traded at a Forward P/E ratio of 24.33. This valuation marks a premium compared to its industry's average Forward P/E of 21.16.

One should further note that TXN currently holds a PEG ratio of 2.7. 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. The Semiconductor - General industry currently had an average PEG ratio of 2.84 as of yesterday's close.

The Semiconductor - General industry is part of the Computer and Technology sector. Currently, this industry holds a Zacks Industry Rank of 227, positioning it in the bottom 10% of all 250+ industries.

The Zacks Industry Rank evaluates the power of our distinct industry groups by determining the average Zacks Rank of the individual stocks forming the groups. 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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