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Texas Instruments (TXN) Gains As Market Dips: What You Should Know

Zacks Equity Research
·3-min read

Texas Instruments (TXN) closed at $172.27 in the latest trading session, marking a +1.02% move from the prior day. This move outpaced the S&P 500's daily loss of 0.48%. Meanwhile, the Dow lost 1.5%, and the Nasdaq, a tech-heavy index, added 0.56%.

Prior to today's trading, shares of the chipmaker had gained 0.77% over the past month. This has outpaced the Computer and Technology sector's loss of 2.16% and the S&P 500's loss of 0.53% in that time.

TXN will be looking to display strength as it nears its next earnings release. The company is expected to report EPS of $1.56, up 25.81% from the prior-year quarter. Our most recent consensus estimate is calling for quarterly revenue of $3.96 billion, up 19.04% from the year-ago period.

Looking at the full year, our Zacks Consensus Estimates suggest analysts are expecting earnings of $6.69 per share and revenue of $16.68 billion. These totals would mark changes of +12.06% and +15.32%, respectively, from last year.

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It is also important to note the recent changes to analyst estimates for TXN. These revisions typically reflect the latest short-term business trends, which can change frequently. As a result, we can interpret positive estimate revisions as a good sign for the company's business outlook.

Based on our research, we believe these estimate revisions are directly related to near-team stock moves. Investors can capitalize on this by using the Zacks Rank. This model considers these estimate changes and provides a simple, actionable rating system.

Ranging from #1 (Strong Buy) to #5 (Strong Sell), the Zacks Rank system has a proven, outside-audited track record of outperformance, with #1 stocks returning an average of +25% annually since 1988. Over the past month, the Zacks Consensus EPS estimate has moved 9.38% higher. TXN currently has a Zacks Rank of #2 (Buy).

Looking at its valuation, TXN is holding a Forward P/E ratio of 25.47. Its industry sports an average Forward P/E of 23.87, so we one might conclude that TXN is trading at a premium comparatively.

Also, we should mention that TXN has a PEG ratio of 2.73. 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 industry currently had an average PEG ratio of 2.61 as of yesterday's close.

The Semiconductor - General industry is part of the Computer and Technology sector. This industry currently has a Zacks Industry Rank of 65, which puts it in the top 26% 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.

To follow TXN in the coming trading sessions, be sure to utilize Zacks.com.


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