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Celgene (CELG) Gains But Lags Market: What You Should Know

Zacks Equity Research
Sterling Bancorp (SBT) doesn't possess the right combination of the two key ingredients for a likely earnings beat in its upcoming report. Get prepared with the key expectations.

In the latest trading session, Celgene (CELG) closed at $96.04, marking a +0.89% move from the previous day. This move lagged the S&P 500's daily gain of 1.05%. Meanwhile, the Dow gained 1.02%, and the Nasdaq, a tech-heavy index, added 1.66%.

Coming into today, shares of the biotechnology company had lost 0.29% in the past month. In that same time, the Medical sector lost 1.73%, while the S&P 500 lost 2.76%.

CELG will be looking to display strength as it nears its next earnings release. On that day, CELG is projected to report earnings of $2.62 per share, which would represent year-over-year growth of 21.3%. Meanwhile, the Zacks Consensus Estimate for revenue is projecting net sales of $4.24 billion, up 11.18% from the year-ago period.

CELG's full-year Zacks Consensus Estimates are calling for earnings of $10.75 per share and revenue of $17.12 billion. These results would represent year-over-year changes of +21.2% and +12.08%, respectively.

Investors should also note any recent changes to analyst estimates for CELG. These revisions typically reflect the latest short-term business trends, which can change frequently. As such, positive estimate revisions reflect analyst optimism about the company's business and profitability.

Based on our research, we believe these estimate revisions are directly related to near-team stock moves. We developed the Zacks Rank to capitalize on this phenomenon. Our system takes these estimate changes into account and delivers a clear, actionable rating model.

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 remained stagnant. CELG is currently sporting a Zacks Rank of #2 (Buy).

In terms of valuation, CELG is currently trading at a Forward P/E ratio of 8.86. This valuation marks a discount compared to its industry's average Forward P/E of 22.2.

Meanwhile, CELG's PEG ratio is currently 0.4. This metric is used similarly to the famous P/E ratio, but the PEG ratio also takes into account the stock's expected earnings growth rate. Medical - Biomedical and Genetics stocks are, on average, holding a PEG ratio of 1.77 based on yesterday's closing prices.

The Medical - Biomedical and Genetics industry is part of the Medical sector. This group has a Zacks Industry Rank of 70, putting it in the top 28% 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 CELG in the coming trading sessions, be sure to utilize Zacks.com.


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