In the latest trading session, Texas Instruments (TXN) closed at $190.91, marking a -0.27% move from the previous day. This change lagged the S&P 500’s 0.14% loss on the day.
Heading into today, shares of the chipmaker had gained 0.37% over the past month, lagging the Computer and Technology sector’s gain of 5.21% and the S&P 500’s gain of 3.13% in that time.
TXN will be looking to display strength as it nears its next earnings release. In that report, analysts expect TXN to post earnings of $2.04 per share. This would mark year-over-year growth of 40.69%. Our most recent consensus estimate is calling for quarterly revenue of $4.65 billion, up 21.73% from the year-ago period.
For the full year, our Zacks Consensus Estimates are projecting earnings of $7.86 per share and revenue of $17.94 billion, which would represent changes of +31.66% and +24.05%, respectively, from the prior year.
Any recent changes to analyst estimates for TXN should also be noted by investors. 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 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. Within the past 30 days, our consensus EPS projection has moved 0.14% higher. TXN currently has a Zacks Rank of #2 (Buy).
Valuation is also important, so investors should note that TXN has a Forward P/E ratio of 24.36 right now. For comparison, its industry has an average Forward P/E of 22.16, which means TXN is trading at a premium to the group.
Also, we should mention that TXN has a PEG ratio of 2.61. The PEG ratio is similar to the widely-used P/E ratio, but this metric also takes the company’s expected earnings growth rate into account. Semiconductor – General stocks are, on average, holding a PEG ratio of 2.61 based on yesterday’s closing prices.
The Semiconductor – General industry is part of the Computer and Technology sector. This industry currently has a Zacks Industry Rank of 36, which puts it in the top 15% 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.
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