GlaxoSmithKline (GSK) closed at $39.20 in the latest trading session, marking no change from the prior day. This move lagged the S&P 500’s daily gain of 0.09%. Meanwhile, the Dow gained 0.26%, and the Nasdaq, a tech-heavy index, lost 0.25%.
Prior to today’s trading, shares of the drug developer had gained 3.62% over the past month. This has lagged the Medical sector’s gain of 5.59% and the S&P 500’s gain of 7.92% 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 $0.69 per share. This would mark a year-over-year decline of 4.17%. Meanwhile, the Zacks Consensus Estimate for revenue is projecting net sales of $9.85 billion, down 2.89% from the year-ago period.
Investors should also note any recent changes to analyst estimates for GSK. These revisions typically reflect the latest short-term business trends, which can change frequently. As such, positive estimate revisions reflect analyst optimism about the company’s business and profitability.
Based on our research, we believe these estimate revisions are directly related to near-team stock moves. To benefit from this, we have developed the Zacks Rank, a proprietary model which takes these estimate changes into account and provides an 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. Over the past month, the Zacks Consensus EPS estimate has moved 0.12% higher. GSK currently has a Zacks Rank of #4 (Sell).
In terms of valuation, GSK is currently trading at a Forward P/E ratio of 13.71. This represents a discount compared to its industry’s average Forward P/E of 14.75.
Investors should also note that GSK has a PEG ratio of 1.95 right now. 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. The Large Cap Pharmaceuticals industry currently had an average PEG ratio of 1.95 as of yesterday’s close.
The Large Cap Pharmaceuticals industry is part of the Medical sector. This group has a Zacks Industry Rank of 158, putting it in the bottom 39% of all 250+ industries.
The Zacks Industry Rank gauges the strength of our industry groups by measuring the average Zacks Rank of the individual stocks within the groups. 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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