Weekly Chart For Texas Instruments Very Consistent And Impressive, But Can It Continue After Earnings

For 2021 as a whole, earnings are expected to increase by 15.8% and revenue is expected to jump by 15%.

The growth rates for the last few quarters and the expected growth rates are impressive, but so are the profitability measurements. The return on equity is incredible at 58.4% and the profit margin is just as impressive at 41.6%.

If we look at the overall fundamental picture, it’s no wonder why Texas Instruments gets a “buy” rating from Tickeron’s scorecard. The fundamental screener shows positive readings for four different indicators and only one negative reading. The one negative is the Outlook rating. The best score comes from the Profit vs. Risk rating and the Valuation rating is almost as high. The SMR rating, which measures sales growth, profit margin, and return on equity, is extremely good as well. The final positive reading comes from the Price Growth rating.

TXN Tickeron FA Screener.jpg

Given the strong growth and the chart, I was very surprised by the valuations. The trailing P/E is 31 and the forward P/E is 28.25. Both of those readings are below the industry averages.

Analysts and Investors Are Less Optimistic about Texas Instruments

Turning our attention to the sentiment indicators for Texas Instruments, analysts and investors are slightly more pessimistic toward the company than they are the average stock. There are 31 analysts covering the stock at this time with 16 “buy” ratings. There are 10 “hold” ratings and five “sell” ratings. The buy percentage is 51.6% and that is below the average buy percentage which falls in the 65% to 75% range.

The short-interest ratio for the stock is at 3.08 currently and that falls right in the heart of the average range. When you look at the positive fundamentals and the chart, you would expect the short-interest ratio to be lower than average, at least that’s how I look at it. The ratio has been pretty consistent since the beginning of the year.

One more indicator that shows slight pessimism toward Texas Instruments is the put/call ratio. Looking at the open interest from the April 30 option series out through next January, there are 103,472 puts open and 86,728 calls open. This gives a put/call ratio of 1.19 and that is above average and reflects more pessimism.

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