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Bausch Health (BHC) Gains But Lags Market: What You Should Know

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In the latest trading session, Bausch Health (BHC - Free Report) closed at $24.57, marking a +1.78% move from the previous day. This change lagged the S&P 500's 1.89% gain on the day. Meanwhile, the Dow gained 1.17%, and the Nasdaq, a tech-heavy index, added 0.75%.

Coming into today, shares of the drugmaker had lost 12.57% in the past month. In that same time, the Medical sector lost 10.76%, while the S&P 500 lost 7.36%.

Investors will be hoping for strength from Bausch Health as it approaches its next earnings release. In that report, analysts expect Bausch Health to post earnings of $1.08 per share. This would mark a year-over-year decline of 18.8%. Our most recent consensus estimate is calling for quarterly revenue of $2.21 billion, down 0.32% from the year-ago period.

Investors should also note any recent changes to analyst estimates for Bausch Health. 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. 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. The Zacks Consensus EPS estimate has moved 0.84% higher within the past month. Bausch Health is currently sporting a Zacks Rank of #3 (Hold).

Digging into valuation, Bausch Health currently has a Forward P/E ratio of 5.06. Its industry sports an average Forward P/E of 14.35, so we one might conclude that Bausch Health is trading at a discount comparatively.

Also, we should mention that BHC has a PEG ratio of 0.25. 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. Medical - Generic Drugs stocks are, on average, holding a PEG ratio of 0.55 based on yesterday's closing prices.

The Medical - Generic Drugs industry is part of the Medical sector. This industry currently has a Zacks Industry Rank of 230, which puts it in the bottom 10% 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.

Be sure to follow all of these stock-moving metrics, and many more, on Zacks.com.


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