Texas Instruments (TXN - Free Report) closed at $97.43 in the latest trading session, marking a -0.84% move from the prior day. This move lagged the S&P 500's daily loss of 0.22%. Meanwhile, the Dow lost 0.11%, and the Nasdaq, a tech-heavy index, lost 0.25%.
Prior to today's trading, shares of the chipmaker had gained 5.85% over the past month. This has outpaced the Computer and Technology sector's gain of 1.37% and the S&P 500's gain of 3.57% in that time.
TXN will be looking to display strength as it nears its next earnings release, which is expected to be January 22, 2019. On that day, TXN is projected to report earnings of $1.24 per share, which would represent year-over-year growth of 13.76%. Meanwhile, the Zacks Consensus Estimate for revenue is projecting net sales of $3.75 billion, up 0.04% from the year-ago period.
For the full year, our Zacks Consensus Estimates are projecting earnings of $5.57 per share and revenue of $15.82 billion, which would represent changes of +30.14% and +5.76%, respectively, from the prior year.
It is also important to note the recent changes to analyst estimates for TXN. These revisions help to show the ever-changing nature of near-term business trends. With this in mind, we can consider positive estimate revisions a sign of optimism about the company's business outlook.
Our research shows that these estimate changes are directly correlated with near-term stock prices. Investors can capitalize on this by using the Zacks Rank. This model considers these estimate changes and provides a simple, actionable 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 remained stagnant. TXN is currently sporting a Zacks Rank of #4 (Sell).
In terms of valuation, TXN is currently trading at a Forward P/E ratio of 17.64. Its industry sports an average Forward P/E of 12.42, so we one might conclude that TXN is trading at a premium comparatively.
Also, we should mention that TXN has a PEG ratio of 1.86. 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 was holding an average PEG ratio of 1.86 at yesterday's closing price.
The Semiconductor - General industry is part of the Computer and Technology sector. This group has a Zacks Industry Rank of 174, putting it in the bottom 32% of all 250+ industries.
The Zacks Industry Rank gauges the strength of our individual 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.
You can find more information on all of these metrics, and much more, on Zacks.com.