GlaxoSmithKline (GSK) Outpaces Stock Market Gains: What You Should Know
GlaxoSmithKline (GSK) closed at $41.43 in the latest trading session, marking a +0.78% move from the prior day. This change outpaced the S&P 500's 0.28% gain on the day.
Prior to today's trading, shares of the drug developer had gained 1.51% over the past month. This has lagged the Medical sector's gain of 2.77% and the S&P 500's gain of 3.07% in that time.
Investors will be hoping for strength from GSK as it approaches its next earnings release. The company is expected to report EPS of $0.79, down 14.13% from the prior-year quarter. Meanwhile, our latest consensus estimate is calling for revenue of $12.01 billion, up 7.55% from the prior-year quarter.
For the full year, our Zacks Consensus Estimates are projecting earnings of $2.77 per share and revenue of $45.63 billion, which would represent changes of -7.05% and +4.16%, respectively, from the prior year.
Any recent changes to analyst estimates for GSK should also be noted by investors. These recent revisions tend to reflect the evolving nature of short-term business trends. With this in mind, we can consider positive estimate revisions a sign of optimism about the company's business outlook.
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.
Ranging from #1 (Strong Buy) to #5 (Strong Sell), the Zacks Rank system has a proven, outside-audited track record of outperformance, with #1 stocks returning an average of +25% annually since 1988. The Zacks Consensus EPS estimate has moved 0.97% higher within the past month. GSK is holding a Zacks Rank of #3 (Hold) right now.
Digging into valuation, GSK currently has a Forward P/E ratio of 14.82. For comparison, its industry has an average Forward P/E of 14.78, which means GSK is trading at a premium to the group.
Investors should also note that GSK has a PEG ratio of 2.17 right now. 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. Large Cap Pharmaceuticals stocks are, on average, holding a PEG ratio of 2.21 based on yesterday's closing prices.
The Large Cap Pharmaceuticals industry is part of the Medical sector. This industry currently has a Zacks Industry Rank of 119, which puts it in the top 47% 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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