GlaxoSmithKline (GSK) closed at $38.34 in the latest trading session, marking a -0.7% move from the prior day. This move was narrower than the S&P 500’s daily loss of 3.24%. Elsewhere, the Dow lost 3.1%, while the tech-heavy Nasdaq lost 3.8%.
Prior to today’s trading, shares of the drug developer had lost 0.59% over the past month. This has lagged the Medical sector’s gain of 4.97% and the S&P 500’s gain of 2.73% in that time.
Investors will be hoping for strength from GSK as it approaches its next earnings release, which is expected to be February 6, 2019. In that report, analysts expect GSK to post earnings of $0.70 per share. This would mark a year-over-year decline of 2.78%.
For the full year, our Zacks Consensus Estimates are projecting earnings of $2.98 per share and revenue of $39.81 billion, which would represent changes of +3.47% and +2.09%, respectively, from the prior year.
Investors should also note any recent changes to analyst estimates for GSK. These revisions help to show the ever-changing nature of near-term business trends. With this in mind, we can consider positive estimate revisions a sign of optimism about the company’s business outlook.
Our research shows that these estimate changes are directly correlated with near-term stock prices. Investors can capitalize on this by using the Zacks Rank. This model considers these estimate changes and provides a simple, actionable 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. The Zacks Consensus EPS estimate has moved 0.89% higher within the past month. GSK currently has a Zacks Rank of #3 (Hold).
Valuation is also important, so investors should note that GSK has a Forward P/E ratio of 12.96 right now. Its industry sports an average Forward P/E of 14.88, so we one might conclude that GSK is trading at a discount comparatively.
It is also worth noting that GSK currently has a PEG ratio of 2.59. 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 was holding an average PEG ratio of 2.03 at yesterday’s closing price.
The Large Cap Pharmaceuticals industry is part of the Medical sector. This industry currently has a Zacks Industry Rank of 104, which puts it in the top 40% 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.
Be sure to follow all of these stock-moving metrics, and many more, on Zacks.com.
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GlaxoSmithKline plc (GSK): Free Stock Analysis Report
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