Novartis (NVS) Increases Yet Falls Behind Market: What Investors Need to Know
Novartis (NVS) closed at $95.88 in the latest trading session, marking a +0.64% move from the prior day. The stock trailed the S&P 500, which registered a daily gain of 0.86%. Meanwhile, the Dow gained 1.22%, and the Nasdaq, a tech-heavy index, added 0.51%.
The drugmaker's stock has dropped by 7.64% in the past month, falling short of the Medical sector's loss of 0.63% and the S&P 500's gain of 2.84%.
Analysts and investors alike will be keeping a close eye on the performance of Novartis in its upcoming earnings disclosure. The company is forecasted to report an EPS of $1.72, showcasing a 0.58% upward movement from the corresponding quarter of the prior year. Meanwhile, the latest consensus estimate predicts the revenue to be $11.41 billion, indicating a 11.9% decrease compared to the same quarter of the previous year.
For the entire fiscal year, the Zacks Consensus Estimates are projecting earnings of $7.17 per share and a revenue of $47.32 billion, representing changes of +3.91% and -4.95%, respectively, from the prior year.
Investors should also note any recent changes to analyst estimates for Novartis. 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.
Our research shows that these estimate changes are directly correlated with near-term stock prices. To take advantage of this, we've established the Zacks Rank, an exclusive model that considers these estimated changes and delivers an operational 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. Over the past month, the Zacks Consensus EPS estimate has moved 0.06% lower. Novartis currently has a Zacks Rank of #3 (Hold).
Valuation is also important, so investors should note that Novartis has a Forward P/E ratio of 13.28 right now. This valuation marks a discount compared to its industry's average Forward P/E of 14.62.
Also, we should mention that NVS has a PEG ratio of 1.48. 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 of the close of trade yesterday, the Large Cap Pharmaceuticals industry held an average PEG ratio of 1.77.
The Large Cap Pharmaceuticals industry is part of the Medical sector. With its current Zacks Industry Rank of 211, this industry ranks in the bottom 17% of all industries, numbering over 250.
The Zacks Industry Rank evaluates the power of our distinct industry groups by determining the average Zacks Rank of the individual stocks forming the groups. Our research shows that the top 50% rated industries outperform the bottom half by a factor of 2 to 1.
Keep in mind to rely on Zacks.com to watch all these stock-impacting metrics, and more, in the succeeding trading sessions.
Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report
Novartis AG (NVS) : Free Stock Analysis Report
