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Allergan (AGN) Gains But Lags Market: What You Should Know

Zacks Equity Research

Allergan (AGN) closed the most recent trading day at $166.70, moving +0.15% from the previous trading session. The stock lagged the S&P 500's daily gain of 0.45%. At the same time, the Dow added 0.29%, and the tech-heavy Nasdaq gained 0.75%.

Heading into today, shares of the Botox maker had gained 35.49% over the past month, outpacing the Medical sector's gain of 1.22% and the S&P 500's gain of 3.84% in that time.

Investors will be hoping for strength from AGN as it approaches its next earnings release. The company is expected to report EPS of $4.27, down 3.39% from the prior-year quarter. Meanwhile, our latest consensus estimate is calling for revenue of $3.90 billion, down 5.39% from the prior-year quarter.

AGN's full-year Zacks Consensus Estimates are calling for earnings of $16.68 per share and revenue of $15.21 billion. These results would represent year-over-year changes of -0.06% and -3.63%, respectively.

Investors should also note any recent changes to analyst estimates for AGN. These recent revisions tend to reflect the evolving nature of short-term business trends. As a result, we can interpret positive estimate revisions as a good sign for the company's business outlook.

Research indicates that these estimate revisions are directly correlated with near-term share price momentum. To benefit from this, we have developed the Zacks Rank, a proprietary model which takes these estimate changes into account and provides an 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. Over the past month, the Zacks Consensus EPS estimate has moved 0% higher. AGN currently has a Zacks Rank of #3 (Hold).

Digging into valuation, AGN currently has a Forward P/E ratio of 9.98. Its industry sports an average Forward P/E of 6.53, so we one might conclude that AGN is trading at a premium comparatively.

We can also see that AGN currently has a PEG ratio of 1.54. 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. AGN's industry had an average PEG ratio of 1.01 as of yesterday's close.

The Medical - Generic Drugs industry is part of the Medical sector. This group has a Zacks Industry Rank of 74, putting it in the top 29% 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.

To follow AGN in the coming trading sessions, be sure to utilize Zacks.com.

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