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Texas Instruments (TXN) Exceeds Market Returns: Some Facts to Consider

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Texas Instruments (TXN - Free Report) closed the most recent trading day at $181.74, moving +1.28% from the previous trading session. The stock exceeded the S&P 500, which registered a gain of 1.08% for the day. Meanwhile, the Dow experienced a rise of 0.92%, and the technology-dominated Nasdaq saw an increase of 1.41%.

The chipmaker's shares have seen a decrease of 3.76% over the last month, surpassing the Computer and Technology sector's loss of 13.17% and the S&P 500's loss of 8.26%.

The upcoming earnings release of Texas Instruments will be of great interest to investors. In that report, analysts expect Texas Instruments to post earnings of $1.06 per share. This would mark a year-over-year decline of 11.67%. Our most recent consensus estimate is calling for quarterly revenue of $3.91 billion, up 6.74% from the year-ago period.

TXN's full-year Zacks Consensus Estimates are calling for earnings of $5.35 per share and revenue of $17.05 billion. These results would represent year-over-year changes of +2.88% and +9%, 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. 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 take advantage of this, we've established the Zacks Rank, an exclusive model that considers these estimated changes and delivers an operational rating system.

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. Over the past month, the Zacks Consensus EPS estimate has remained steady. Texas Instruments is holding a Zacks Rank of #3 (Hold) right now.

With respect to valuation, Texas Instruments is currently being traded at a Forward P/E ratio of 33.56. For comparison, its industry has an average Forward P/E of 28.76, which means Texas Instruments is trading at a premium to the group.

One should further note that TXN currently holds a PEG ratio of 2.9. 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 average PEG ratio for the Semiconductor - General industry stood at 1.98 at the close of the market yesterday.

The Semiconductor - General industry is part of the Computer and Technology sector. Currently, this industry holds a Zacks Industry Rank of 34, positioning it in the top 14% of all 250+ industries.

The strength of our individual industry groups is measured by the Zacks Industry Rank, which is calculated based on the average Zacks Rank of the individual stocks within these groups. Our research shows that the top 50% rated industries outperform the bottom half by a factor of 2 to 1.

Don't forget to use Zacks.com to keep track of all these stock-moving metrics, and others, in the upcoming trading sessions.


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