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Texas Instruments (TXN) Sees a More Significant Dip Than Broader Market: Some Facts to Know

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In the latest market close, Texas Instruments (TXN - Free Report) reached $166.74, with a -1.49% movement compared to the previous day. This move lagged the S&P 500's daily loss of 0.8%. Elsewhere, the Dow saw a downswing of 0.76%, while the tech-heavy Nasdaq depreciated by 1.18%.

Coming into today, shares of the chipmaker had gained 7.64% in the past month. In that same time, the Computer and Technology sector gained 2.11%, while the S&P 500 gained 3.4%.

Market participants will be closely following the financial results of Texas Instruments in its upcoming release. It is anticipated that the company will report an EPS of $1.46, marking a 31.46% fall compared to the same quarter of the previous 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.

Investors might also notice recent changes to analyst estimates for Texas Instruments. These recent revisions tend to reflect the evolving nature of short-term business trends. Therefore, positive revisions in estimates convey analysts' confidence in the company's business performance and profit potential.

Our research reveals that these estimate alterations are directly linked with the stock price performance in the near future. To benefit from this, we have developed the Zacks Rank, a proprietary model which takes these estimate changes into account and provides an actionable rating system.

The Zacks Rank system ranges from #1 (Strong Buy) to #5 (Strong Sell). It has a remarkable, outside-audited track record of success, with #1 stocks delivering an average annual return of +25% since 1988. Over the past month, the Zacks Consensus EPS estimate has moved 0.08% lower. At present, Texas Instruments boasts a Zacks Rank of #4 (Sell).

Looking at valuation, Texas Instruments is presently trading at a Forward P/E ratio of 25.8. This valuation marks a premium compared to its industry's average Forward P/E of 23.63.

One should further note that TXN currently holds a PEG ratio of 2.87. 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 average PEG ratio for the Semiconductor - General industry stood at 2.89 at the close of the market yesterday.

The Semiconductor - General industry is part of the Computer and Technology sector. This industry, currently bearing a Zacks Industry Rank of 223, finds itself in the bottom 12% echelons 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.

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


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