In the latest trading session, GlaxoSmithKline (GSK) closed at $41.64, marking a -0.74% move from the previous day. This move was narrower than the S&P 500’s daily loss of 3.25%. Elsewhere, the Dow lost 2.42%, while the tech-heavy Nasdaq lost 0.48%.
Coming into 16 June, shares of the drug developer had lost 3.85% in the past month. In that same time, the Medical sector lost 1.96%, while the S&P 500 lost 5.62%.
GlaxoSmithKline will be looking to display strength as it nears its next earnings release. The company is expected to report EPS of $0.68, down 13.92% from the prior-year quarter. The most recent consensus estimate is calling for quarterly revenue of $11.12 billion, down 1.72% from the year-ago period.
Looking at the full year, Zacks Consensus Estimates suggest analysts are expecting earnings of $3.18 per share and revenue of $48.8 billion. These totals would mark changes of +2.25% and +4.08%, respectively, from last year.
Any recent changes to analyst estimates for GlaxoSmithKline should also be noted by investors. Recent revisions tend to reflect the latest near-term business trends. With this in mind, we can consider positive estimate revisions a sign of optimism about the company’s business outlook.
The 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 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. The Zacks Consensus EPS estimate has moved 0.5% lower within the past month. GlaxoSmithKline currently has a Zacks Rank of №3 (Hold).
Valuation is also important, so investors should note that GlaxoSmithKline has a Forward P/E ratio of 13.21 right now. This valuation marks a premium compared to its industry’s average Forward P/E of 12.54.
It is also worth noting that GSK currently has a PEG ratio of 1.87. 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. Large Cap Pharmaceuticals stocks are, on average, holding a PEG ratio of 2.12 based on yesterday’s closing prices.
The Large Cap Pharmaceuticals industry is part of the Medical sector. This group has a Zacks Industry Rank of 156, 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.The research shows that the top 50% rated industries outperform the bottom half by a factor of 2 to 1.