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Here's Why Texas Instruments (TXN) Gained But Lagged the Market Today

Texas Instruments (TXN) closed the latest trading day at $194.90, indicating a +0.52% change from the previous session's end. This change lagged the S&P 500's 0.77% gain on the day. On the other hand, the Dow registered a gain of 0.49%, and the technology-centric Nasdaq increased by 0.95%.

Heading into today, shares of the chipmaker had lost 0.57% over the past month, outpacing the Computer and Technology sector's loss of 3.05% and lagging the S&P 500's gain of 3.71% in that time.

The investment community will be paying close attention to the earnings performance of Texas Instruments in its upcoming release. The company's earnings per share (EPS) are projected to be $1.16, reflecting a 37.97% decrease from the same quarter last year. Meanwhile, the Zacks Consensus Estimate for revenue is projecting net sales of $3.8 billion, down 16.15% from the year-ago period.

TXN's full-year Zacks Consensus Estimates are calling for earnings of $5.13 per share and revenue of $15.74 billion. These results would represent year-over-year changes of -27.44% and -10.18%, respectively.

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Investors should also take note of any recent adjustments to analyst estimates for Texas Instruments. These revisions typically reflect the latest short-term business trends, which can change frequently. As such, positive estimate revisions reflect analyst optimism about the company's business and profitability.

Our research shows that these estimate changes are directly correlated with near-term stock prices. 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, 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 moved 0.73% lower. Texas Instruments is holding a Zacks Rank of #3 (Hold) right now.

Digging into valuation, Texas Instruments currently has a Forward P/E ratio of 37.8. Its industry sports an average Forward P/E of 29.02, so one might conclude that Texas Instruments is trading at a premium comparatively.

We can additionally observe that TXN currently boasts a PEG ratio of 4.2. The PEG ratio is akin to the commonly utilized P/E ratio, but this measure also incorporates the company's anticipated earnings growth rate. The Semiconductor - General industry had an average PEG ratio of 2.65 as trading concluded yesterday.

The Semiconductor - General industry is part of the Computer and Technology sector. With its current Zacks Industry Rank of 74, this industry ranks in the top 30% of all industries, numbering over 250.

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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Texas Instruments Incorporated (TXN) : Free Stock Analysis Report

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