GlaxoSmithKline (GSK) Outpaces Stock Market Gains: What You Should Know
GlaxoSmithKline (GSK) closed the most recent trading day at $41.95, moving +1.72% from the previous trading session. This move outpaced the S&P 500's daily gain of 1.46%. Meanwhile, the Dow gained 1%, and the Nasdaq, a tech-heavy index, lost 0.18%.
Coming into today, shares of the drug developer had lost 7.76% in the past month. In that same time, the Medical sector lost 3.17%, while the S&P 500 lost 6.94%.
GlaxoSmithKline will be looking to display strength as it nears its next earnings release. On that day, GlaxoSmithKline is projected to report earnings of $0.68 per share, which would represent a year-over-year decline of 13.92%. Our most recent consensus estimate is calling for quarterly revenue of $11.12 billion, down 1.72% from the year-ago period.
GSK's full-year Zacks Consensus Estimates are calling for earnings of $3.18 per share and revenue of $48.8 billion. These results would represent year-over-year changes of +2.25% and +4.08%, respectively.
It is also important to note the recent changes to analyst estimates for GlaxoSmithKline. These revisions help to show the ever-changing nature of near-term business trends. As a result, we can interpret positive estimate revisions as a good sign for the company's business outlook.
Based on our research, we believe these estimate revisions are directly related to near-team stock moves. 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, 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. Within the past 30 days, our consensus EPS projection has moved 0.5% lower. GlaxoSmithKline is holding a Zacks Rank of #3 (Hold) right now.
Digging into valuation, GlaxoSmithKline currently has a Forward P/E ratio of 12.98. Its industry sports an average Forward P/E of 12.44, so we one might conclude that GlaxoSmithKline is trading at a premium comparatively.
We can also see that GSK currently has a PEG ratio of 1.84. 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. GSK's industry had an average PEG ratio of 2.11 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 177, which puts it in the bottom 31% 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.
You can find more information on all of these metrics, and much more, on Zacks.com.
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