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GlaxoSmithKline (GSK) Dips More Than Broader Markets: What You Should Know

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GlaxoSmithKline (GSK) closed the most recent trading day at $40.92, moving -1.25% from the previous trading session. This move lagged the S&P 500's daily loss of 0.45%. At the same time, the Dow lost 0.67%, and the tech-heavy Nasdaq lost 0.06%.

Heading into today, shares of the drug developer had gained 0.48% over the past month, lagging the Medical sector's gain of 2.19% and outpacing the S&P 500's loss of 1.89% in that time.

Wall Street will be looking for positivity from GlaxoSmithKline as it approaches its next earnings report date. The company is expected to report EPS of $0.67, down 15.19% from the prior-year quarter. Meanwhile, our latest consensus estimate is calling for revenue of $9.35 billion, down 17.33% from the prior-year quarter.

For the full year, our Zacks Consensus Estimates are projecting earnings of $3.17 per share and revenue of $42.75 billion, which would represent changes of +1.93% and -8.83%, respectively, from the prior year.

Investors might also notice recent changes to analyst estimates for GlaxoSmithKline. Recent revisions tend to reflect the latest near-term business trends. With this in mind, we can consider positive estimate revisions a sign of optimism about the company's business outlook.

Research indicates that these estimate revisions are directly correlated with near-term share price momentum. Investors can capitalize on this by using the Zacks Rank. This model considers these estimate changes and provides a simple, 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. The Zacks Consensus EPS estimate has moved 0.24% lower within the past month. GlaxoSmithKline currently has a Zacks Rank of #3 (Hold).

Digging into valuation, GlaxoSmithKline currently has a Forward P/E ratio of 13.08. This valuation marks a premium compared to its industry's average Forward P/E of 12.94.

Meanwhile, GSK's PEG ratio is currently 1.85. 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. The Large Cap Pharmaceuticals was holding an average PEG ratio of 1.94 at yesterday's closing price.

The Large Cap Pharmaceuticals industry is part of the Medical sector. This industry currently has a Zacks Industry Rank of 88, which puts it in the top 35% of all 250+ industries.

The Zacks Industry Rank gauges the strength of our individual 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 GSK in the coming trading sessions, be sure to utilize Zacks.com.


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