GlaxoSmithKline (GSK) Gains But Lags Market: What You Should Know
GlaxoSmithKline (GSK) closed the most recent trading day at $43.32, moving +0.49% from the previous trading session. This move lagged the S&P 500's daily gain of 1.5%. At the same time, the Dow added 1.12%, and the tech-heavy Nasdaq gained 0.32%.
Coming into today, shares of the drug developer had lost 2.47% in the past month. In that same time, the Medical sector lost 0.3%, while the S&P 500 lost 6.54%.
GlaxoSmithKline will be looking to display strength as it nears its next earnings release. In that report, analysts expect GlaxoSmithKline to post earnings of $0.67 per share. This would mark a year-over-year decline of 15.19%. Our most recent consensus estimate is calling for quarterly revenue of $9.46 billion, down 16.31% from the year-ago period.
For the full year, our Zacks Consensus Estimates are projecting earnings of $3.16 per share and revenue of $43.12 billion, which would represent changes of +1.61% and -8.04%, respectively, from the prior year.
Any recent changes to analyst estimates for GlaxoSmithKline should also be noted by investors. 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.
Our research shows that these estimate changes are directly correlated with near-term stock prices. 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, which ranges from #1 (Strong Buy) to #5 (Strong Sell), has an impressive outside-audited track record of outperformance, with #1 stocks generating an average annual return of +25% since 1988. Over the past month, the Zacks Consensus EPS estimate has moved 0.45% lower. GlaxoSmithKline is holding a Zacks Rank of #3 (Hold) right now.
Digging into valuation, GlaxoSmithKline currently has a Forward P/E ratio of 13.64. Its industry sports an average Forward P/E of 13.19, so we one might conclude that GlaxoSmithKline is trading at a premium comparatively.
Meanwhile, GSK's PEG ratio is currently 1.93. 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. GSK's industry had an average PEG ratio of 1.98 as of yesterday's close.
The Large Cap Pharmaceuticals industry is part of the Medical sector. This industry currently has a Zacks Industry Rank of 96, which puts it in the top 39% 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.
Be sure to follow all of these stock-moving metrics, and many more, on Zacks.com.
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