TXN - Texas Instruments: Why P/E Can Be Misleading For Cyclical Stocks

2024-05-14 12:38:22 ET

Summary

• Texas Instruments stock currently has a high P/E ratio compared to its historical track record and sector median.
• However, P/E ratios can be misleading for highly cyclical stocks like TXN.
• They could lead to buying near cyclical highs and selling near cyclical lows.
• Alternative/additional metrics to consider for evaluating TXN stock include topline growth rates, dividend yield, and inventory levels.

TXN stock: P/E ratio can be misleading

Judging by its P/E, Texas Instruments ( TXN ) stock is quite unattractive under current conditions. More specifically, the chart below summarizes TXN stock's valuation grade in comparison to its historical track record and the sector median....

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