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Texas Instruments (TXN) Falls More Steeply Than Broader Market: What Investors Need to Know

Texas Instruments (TXN) closed at $163.07 in the latest trading session, marking a -1.13% move from the prior day. The stock fell short of the S&P 500, which registered a loss of 0.17% for the day. Meanwhile, the Dow experienced a drop of 0.06%, and the technology-dominated Nasdaq saw a decrease of 0.55%.

Heading into today, shares of the chipmaker had gained 1.78% over the past month, lagging the Computer and Technology sector's gain of 2.65% and the S&P 500's gain of 3.98% 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 $1.06, reflecting a 42.7% decrease from the same quarter last year. Simultaneously, our latest consensus estimate expects the revenue to be $3.61 billion, showing a 17.65% drop compared to the year-ago quarter.

For the full year, the Zacks Consensus Estimates project earnings of $5.17 per share and a revenue of $15.91 billion, demonstrating changes of -26.87% and -9.19%, respectively, from the preceding year.

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It's also important for investors to be aware of any recent modifications to analyst estimates for Texas Instruments. These recent revisions tend to reflect the evolving nature of short-term business trends. Consequently, upward revisions in estimates express analysts' positivity towards the company's business operations and its ability to generate profits.

Our research shows that these estimate changes are directly correlated with near-term stock prices. 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, there's been a 2.03% fall in the Zacks Consensus EPS estimate. Texas Instruments currently has a Zacks Rank of #5 (Strong Sell).

In terms of valuation, Texas Instruments is currently trading at a Forward P/E ratio of 31.88. This denotes a premium relative to the industry's average Forward P/E of 31.4.

Investors should also note that TXN has a PEG ratio of 3.54 right now. The PEG ratio bears resemblance to the frequently used P/E ratio, but this parameter also includes the company's expected earnings growth trajectory. Semiconductor - General stocks are, on average, holding a PEG ratio of 2.6 based on yesterday's closing prices.

The Semiconductor - General industry is part of the Computer and Technology sector. Currently, this industry holds a Zacks Industry Rank of 101, positioning it in the top 41% 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.

You can find more information on all of these metrics, and much more, on Zacks.com.

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Texas Instruments Incorporated (TXN) : Free Stock Analysis Report

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