Texas Instruments (TXN) Laps the Stock Market: Here's Why

Texas Instruments (TXN) closed the most recent trading day at $194.01, moving +1.69% from the previous trading session. The stock outpaced the S&P 500's daily gain of 1.01%. Meanwhile, the Dow gained 0.83%, and the Nasdaq, a tech-heavy index, added 1.22%.

Coming into today, shares of the chipmaker had lost 15.64% in the past month. In that same time, the Computer and Technology sector lost 2.06%, while the S&P 500 lost 2.86%.

The investment community will be paying close attention to the earnings performance of Texas Instruments in its upcoming release. The company is forecasted to report an EPS of $1.37, showcasing a 7.03% upward movement from the corresponding quarter of the prior year. Meanwhile, the latest consensus estimate predicts the revenue to be $4.52 billion, indicating a 11.01% increase compared to the same quarter of the previous year.

For the annual period, the Zacks Consensus Estimates anticipate earnings of $6.38 per share and a revenue of $19.37 billion, signifying shifts of +17.06% and +9.57%, respectively, from the last year.

Investors should also note any recent changes to analyst estimates for Texas Instruments. Recent revisions tend to reflect the latest near-term business trends. Consequently, upward revisions in estimates express analysts' positivity towards the business operations and its ability to generate profits.

Our research reveals that these estimate alterations are directly linked with the stock price performance in the near future. 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, stretching from #1 (Strong Buy) to #5 (Strong Sell), has a noteworthy track record of outperforming, validated by third-party audits, with stocks rated #1 producing an average annual return of +25% since the year 1988. Over the past month, there's been a 0.19% fall in the Zacks Consensus EPS estimate. Texas Instruments is currently sporting a Zacks Rank of #3 (Hold).

Valuation is also important, so investors should note that Texas Instruments has a Forward P/E ratio of 29.89 right now. This valuation marks a discount compared to its industry average Forward P/E of 30.53.

One should further note that TXN currently holds a PEG ratio of 1.72. 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. TXN's industry had an average PEG ratio of 1.72 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 170, which puts it in the bottom 31% 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.

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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This article originally published on Zacks Investment Research (zacks.com).

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