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GlaxoSmithKline (GSK) Dips More Than Broader Markets: What You Should Know

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GlaxoSmithKline (GSK - Free Report) closed the most recent trading day at $40.22, moving -1.71% from the previous trading session. This change lagged the S&P 500's daily loss of 0.3%. Elsewhere, the Dow lost 0.46%, while the tech-heavy Nasdaq lost 0.28%.

Heading into today, shares of the drug developer had lost 2.46% over the past month, lagging the Medical sector's gain of 5.06% and the S&P 500's gain of 1.51% in that time.

Wall Street will be looking for positivity from GlaxoSmithKline as it approaches its next earnings report date. On that day, GlaxoSmithKline is projected to report earnings of $0.67 per share, which would represent a year-over-year decline of 15.19%. Our most recent consensus estimate is calling for quarterly revenue of $9.35 billion, down 17.33% from the year-ago period.

GSK's full-year Zacks Consensus Estimates are calling for earnings of $3.17 per share and revenue of $42.75 billion. These results would represent year-over-year changes of +1.93% and -8.83%, respectively.

Investors should also note any recent changes to analyst estimates for GlaxoSmithKline. These revisions help to show the ever-changing nature of near-term business trends. As such, positive estimate revisions reflect analyst optimism about the company's business and profitability.

Our research shows that these estimate changes are directly correlated with near-term stock prices. We developed the Zacks Rank to capitalize on this phenomenon. Our system takes these estimate changes into account and delivers a clear, actionable rating model.

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 0.24% lower. GlaxoSmithKline is currently a Zacks Rank #3 (Hold).

Looking at its valuation, GlaxoSmithKline is holding a Forward P/E ratio of 12.91. This represents a premium compared to its industry's average Forward P/E of 12.87.

It is also worth noting that GSK currently has a PEG ratio of 1.83. 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 1.94 as of yesterday's close.

The Large Cap Pharmaceuticals industry is part of the Medical sector. This group has a Zacks Industry Rank of 83, putting it in the top 33% 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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