In the latest trading session, GlaxoSmithKline (GSK) closed at $40.42, marking a +0.52% move from the previous day. This move lagged the S&P 500's daily gain of 1.31%. At the same time, the Dow added 1.9%, and the tech-heavy Nasdaq gained 1.01%.
GSK will be looking to display strength as it nears its next earnings release. On that day, GSK is projected to report earnings of $0.60 per share, which would represent a year-over-year decline of 23.08%. Our most recent consensus estimate is calling for quarterly revenue of $10.13 billion, up 0.94% from the year-ago period.
For the full year, our Zacks Consensus Estimates are projecting earnings of $2.90 per share and revenue of $43.85 billion, which would represent changes of -8.52% and +1.86%, respectively, from the prior year.
Any recent changes to analyst estimates for GSK should also be noted by investors. Recent revisions tend to reflect the latest near-term business trends. As a result, we can interpret positive estimate revisions as a good sign for the company's business outlook.
Research indicates that these estimate revisions are directly correlated with near-term share price momentum. 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. Within the past 30 days, our consensus EPS projection has moved 1.47% lower. GSK is currently a Zacks Rank #3 (Hold).
In terms of valuation, GSK is currently trading at a Forward P/E ratio of 13.87. Its industry sports an average Forward P/E of 14.63, so we one might conclude that GSK is trading at a discount comparatively.
Meanwhile, GSK's PEG ratio is currently 5.01. This popular metric is similar to the widely-known P/E ratio, with the difference being that the PEG ratio also takes into account the company's expected earnings growth rate. Large Cap Pharmaceuticals stocks are, on average, holding a PEG ratio of 2.02 based on yesterday's closing prices.
The Large Cap Pharmaceuticals industry is part of the Medical sector. This industry currently has a Zacks Industry Rank of 15, which puts it in the top 6% 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.
You can find more information on all of these metrics, and much more, on Zacks.com.
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