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Texas Instruments (TXN) Outpaces Stock Market Gains: What You Should Know

Zacks Equity Research
·3-min read

Texas Instruments (TXN) closed at $187.01 in the latest trading session, marking a +1.55% move from the prior day. This move outpaced the S&P 500's daily gain of 0.08%. At the same time, the Dow lost 0.56%, and the tech-heavy Nasdaq lost 4.81%.

Heading into today, shares of the chipmaker had gained 0.38% over the past month, outpacing the Computer and Technology sector's loss of 2.99% and lagging the S&P 500's gain of 0.64% in that time.

Texas Instruments will be looking to display strength as it nears its next earnings release, which is expected to be January 25, 2022. On that day, Texas Instruments is projected to report earnings of $1.95 per share, which would represent year-over-year growth of 8.33%. Meanwhile, the Zacks Consensus Estimate for revenue is projecting net sales of $4.44 billion, up 8.87% from the year-ago period.

It is also important to note the recent changes to analyst estimates for Texas Instruments. These revisions help to show the ever-changing nature of near-term business trends. As a result, we can interpret positive estimate revisions as a good sign for the company's business outlook.

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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.

The Zacks Rank system ranges from #1 (Strong Buy) to #5 (Strong Sell). It has a remarkable, outside-audited track record of success, with #1 stocks delivering an average annual return of +25% since 1988. The Zacks Consensus EPS estimate remained stagnant within the past month. Texas Instruments currently has a Zacks Rank of #3 (Hold).

Looking at its valuation, Texas Instruments is holding a Forward P/E ratio of 22.75. Its industry sports an average Forward P/E of 18.29, so we one might conclude that Texas Instruments is trading at a premium comparatively.

It is also worth noting that TXN currently has a PEG ratio of 2.44. 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 2.84 as of yesterday's close.

The Semiconductor - General industry is part of the Computer and Technology sector. This group has a Zacks Industry Rank of 54, putting it in the top 22% 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.

Be sure to follow all of these stock-moving metrics, and many more, on Zacks.com.


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