Here's Why Novartis (NVS) Fell More Than Broader Market
Novartis (NVS) ended the recent trading session at $102.22, demonstrating a -0.9% swing from the preceding day's closing price. The stock's change was less than the S&P 500's daily loss of 0.17%. Meanwhile, the Dow experienced a drop of 0.06%, and the technology-dominated Nasdaq saw a decrease of 0.55%.
Coming into today, shares of the drugmaker had lost 4.27% in the past month. In that same time, the Medical sector gained 5.93%, while the S&P 500 gained 3.98%.
Analysts and investors alike will be keeping a close eye on the performance of Novartis in its upcoming earnings disclosure. The company's earnings per share (EPS) are projected to be $1.71, reflecting no change from the same quarter last year. Our most recent consensus estimate is calling for quarterly revenue of $11.43 billion, down 11.75% from the year-ago period.
In terms of the entire fiscal year, the Zacks Consensus Estimates predict earnings of $7.18 per share and a revenue of $47.44 billion, indicating changes of +4.06% and -4.69%, respectively, from the former year.
Investors should also take note of any recent adjustments to analyst estimates for Novartis. These recent revisions tend to reflect the evolving nature of short-term business trends. Hence, positive alterations in estimates signify analyst optimism regarding the company's business and profitability.
Empirical research indicates that these revisions in estimates have a direct correlation with impending stock price performance. To exploit this, we've formed the Zacks Rank, a quantitative model that includes these estimate changes and presents a viable rating system.
The Zacks Rank system, which varies between #1 (Strong Buy) and #5 (Strong Sell), carries an impressive track record of exceeding expectations, confirmed by external audits, with stocks at #1 delivering an average annual return of +25% since 1988. Over the past month, the Zacks Consensus EPS estimate has moved 1.35% lower. At present, Novartis boasts a Zacks Rank of #3 (Hold).
Looking at valuation, Novartis is presently trading at a Forward P/E ratio of 14.38. This denotes a discount relative to the industry's average Forward P/E of 15.11.
We can also see that NVS currently has a PEG ratio of 1.6. The PEG ratio is similar to the widely-used P/E ratio, but this metric also takes the company's expected earnings growth rate into account. As the market closed yesterday, the Large Cap Pharmaceuticals industry was having an average PEG ratio of 1.69.
The Large Cap Pharmaceuticals industry is part of the Medical sector. With its current Zacks Industry Rank of 174, this industry ranks in the bottom 31% of all industries, numbering over 250.
The Zacks Industry Rank assesses the strength of our separate industry groups by calculating the average Zacks Rank of the individual stocks contained within the groups. Our research shows that the top 50% rated industries outperform the bottom half by a factor of 2 to 1.
Remember to apply Zacks.com to follow these and more stock-moving metrics during the upcoming trading sessions.
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Novartis AG (NVS) : Free Stock Analysis Report
