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Texas Instruments (TXN) Touches New 52-Week High of $82.44

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Shares of Texas Instruments or TI (TXN - Free Report) hit a new 52-week high of $82.44 on Mar 17, eventually closing at $82.20. The company has added approximately 12.7% year to date. Average volume of shares traded over the last three months was roughly 5,169K.

The company’s shares have charted a solid trajectory in recent times, appreciating over 44.0% in the past one year, ahead of the Zacks Semiconductor General industry’s gain of roughly 36.5%.

Notably, the company witnessed a 6.6% jump in share price over the past two months following its encouraging fourth-quarter 2016 results.

What is DrivingTexas Instruments?

Texas Instruments is one of the largest suppliers of analog integrated circuits. The company’s compelling product line, increasing share in the automotive market, differentiation in its business and lower-cost 300mm capacity should in combination drive its share price.

The price appreciation can also be attributed to TI’s strong fundamentals and better-than-expected fourth-quarter 2016 results.

TI reported strong fourth-quarter earnings of 88 cents per share, surpassing the Zacks Consensus Estimate by 7 cents. Revenues of $3.41 billion were within the guided range and above the Zacks Consensus Estimate by 3.2%. The automotive market was again strong in the quarter with growth spread across all five sectors inside this market. The company has also seen broad-based improvement in the industrial market.

Moreover, margins expanded and should continue doing so because of the secular strength in the automotive and industrial markets, a stronger mix of analog and embedded processing products, benefits of restructuring actions and more 300mm capacity coming online.

The company also provided a solid guidance for the upcoming results. For the first quarter, revenues are expected in the range of $3.17 billion and $3.43 billion. The Zacks Consensus Estimate of $3.30 billion falls within the guided range. Earnings per share are expected at 78 cents to 88 cents, while the Zacks Consensus Estimate is pegged at 83 cents.

The upbeat guidance reflects recovering auto and industrial markets, which are helping the company. Also, channel inventories remained very low in the fourth quarter, meaning that demand is likely to remain strong.

Also, TI has an impressive record of returning cash to its shareholders through share buybacks and regular dividends payouts. In the fourth quarter, the company spent $475 million on share repurchases and $499 million on cash dividends.

Additionally, TI delivered an average positive earnings surprise of nearly 7.09% in the trailing four quarters. The Zacks Rank #1 (Strong Buy) company’s solid market position in the analog market, solid execution, continued innovation and strong long-term growth potential position it well. The company has a market cap of $82.2 billion.

Other Stocks to Consider

Some other Zacks Rank #1 stocks in the broader technology sector are ON Semiconductor Corporation (ON - Free Report) , Advanced Energy Industries, Inc. (AEIS - Free Report) and Alibaba Group Holding Limited (BABA - Free Report) . You can see the complete list of today’s Zacks #1 Rank stocks here.

For the current year, while estimates for ON Semiconductor went up 7.8% in the past 60 days, Advanced Energy estimates went up by 18.2% and  Alibaba estimates remained unchanged during the same time frame.

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