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GlaxoSmithKline (GSK) Stock Sinks As Market Gains: What You Should Know

Zacks Equity Research
Big Lots (BIG) 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.

GlaxoSmithKline (GSK) closed the most recent trading day at $40.03, moving -0.12% from the previous trading session. This change lagged the S&P 500's 0.3% gain on the day. At the same time, the Dow lost 0.38%, and the tech-heavy Nasdaq gained 0.44%.

Coming into today, shares of the drug developer had lost 0.37% in the past month. In that same time, the Medical sector gained 2.07%, while the S&P 500 gained 2.91%.

Investors will be hoping for strength from GSK as it approaches its next earnings release. On that day, GSK is projected to report earnings of $0.63 per share, which would represent a year-over-year decline of 7.35%. Meanwhile, our latest consensus estimate is calling for revenue of $9.87 billion, down 1.74% from the prior-year quarter.

Looking at the full year, our Zacks Consensus Estimates suggest analysts are expecting earnings of $2.88 per share and revenue of $41.33 billion. These totals would mark changes of -8.86% and +3.46%, respectively, from last year.

Investors should also note any recent changes to analyst estimates for GSK. These revisions typically reflect the latest short-term business trends, which can change frequently. 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. To benefit from this, we have developed the Zacks Rank, a proprietary model which takes these estimate changes into account and provides an actionable rating system.

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 2.95% lower within the past month. GSK is currently a Zacks Rank #3 (Hold).

Investors should also note GSK's current valuation metrics, including its Forward P/E ratio of 13.9. This represents a discount compared to its industry's average Forward P/E of 15.09.

We can also see that GSK currently has a PEG ratio of 2.02. 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. Large Cap Pharmaceuticals stocks are, on average, holding a PEG ratio of 2.09 based on yesterday's closing prices.

The Large Cap Pharmaceuticals industry is part of the Medical sector. This group has a Zacks Industry Rank of 97, putting it in the top 39% of all 250+ industries.

The Zacks Industry Rank includes is listed in order from best to worst in terms of the average Zacks Rank of the individual companies within each of these sectors. Our research shows that the top 50% rated industries outperform the bottom half by a factor of 2 to 1.

Make sure to utilize Zacks. Com to follow all of these stock-moving metrics, and more, in the coming trading sessions.

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