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Mallinckrodt (MNK) Outpaces Stock Market Gains: What You Should Know

Zacks Equity Research

Mallinckrodt (MNK) closed the most recent trading day at $9.18, moving +1.89% from the previous trading session. This change outpaced the S&P 500's 0.58% gain on the day. Elsewhere, the Dow gained 0.28%, while the tech-heavy Nasdaq added 0.48%.

Heading into today, shares of the specialty pharmaceutical company had lost 0.44% over the past month, lagging the Medical sector's gain of 3.02% and the S&P 500's gain of 3.62% in that time.

MNK will be looking to display strength as it nears its next earnings release. The company is expected to report EPS of $2.13, up 19.66% from the prior-year quarter. Our most recent consensus estimate is calling for quarterly revenue of $830.20 million, up 31.42% from the year-ago period.

MNK's full-year Zacks Consensus Estimates are calling for earnings of $8.24 per share and revenue of $3.24 billion. These results would represent year-over-year changes of +2.87% and +20.86%, respectively.

It is also important to note the recent changes to analyst estimates for MNK. These revisions typically reflect the latest short-term business trends, which can change frequently. 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 ranges from #1 (Strong Buy) to #5 (Strong Sell). It has a remarkable, outside-audited track record of success, with #1 stocks delivering an average annual return of +25% since 1988. Over the past month, the Zacks Consensus EPS estimate has moved 0.52% lower. MNK is currently sporting a Zacks Rank of #3 (Hold).

Investors should also note MNK's current valuation metrics, including its Forward P/E ratio of 1.09. This valuation marks a discount compared to its industry's average Forward P/E of 7.1.

Investors should also note that MNK has a PEG ratio of 0.09 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. Medical - Generic Drugs stocks are, on average, holding a PEG ratio of 1.03 based on yesterday's closing prices.

The Medical - Generic Drugs industry is part of the Medical sector. This industry currently has a Zacks Industry Rank of 165, which puts it in the bottom 36% 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.

You can find more information on all of these metrics, and much more, on Zacks.com.

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