Novartis (NVS) Stock Drops Despite Market Gains: Important Facts to Note
In the latest trading session, Novartis (NVS) closed at $107.45, marking a -0.14% move from the previous day. The stock fell short of the S&P 500, which registered a gain of 0.08% for the day. At the same time, the Dow lost 0.31%, and the tech-heavy Nasdaq gained 0.02%.
Prior to today's trading, shares of the drugmaker had gained 8.83% over the past month. This has outpaced the Medical sector's gain of 6.57% and the S&P 500's gain of 3.52% in that time.
Market participants will be closely following the financial results of Novartis in its upcoming release. The company is forecasted to report an EPS of $1.66, showcasing a 9.93% upward movement from the corresponding quarter of the prior year. At the same time, our most recent consensus estimate is projecting a revenue of $11.67 billion, reflecting an 8.01% fall from the equivalent quarter last year.
Investors should also note any recent changes to analyst estimates for Novartis. Recent revisions tend to reflect the latest near-term business trends. As such, positive estimate revisions reflect analyst optimism about 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 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 0.76% higher. Novartis is currently sporting a Zacks Rank of #3 (Hold).
In the context of valuation, Novartis is at present trading with a Forward P/E ratio of 14.88. This valuation marks a premium compared to its industry's average Forward P/E of 14.63.
Also, we should mention that NVS has a PEG ratio of 1.71. 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. The Large Cap Pharmaceuticals industry currently had an average PEG ratio of 1.82 as of yesterday's close.
The Large Cap Pharmaceuticals industry is part of the Medical sector. This industry, currently bearing a Zacks Industry Rank of 163, finds itself in the bottom 36% echelons of all 250+ industries.
The strength of our individual industry groups is measured by the Zacks Industry Rank, which is calculated based on the average Zacks Rank of the individual stocks within these groups. Our research shows that the top 50% rated industries outperform the bottom half by a factor of 2 to 1.
Ensure to harness Zacks.com to stay updated with all these stock-shifting metrics, among others, in the next trading sessions.
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Novartis AG (NVS) : Free Stock Analysis Report
