Back to top

Image: Bigstock

GSK (GSK) Gains As Market Dips: What You Should Know

Read MoreHide Full Article

GSK (GSK - Free Report) closed the most recent trading day at $37.48, moving +0.35% from the previous trading session. This change outpaced the S&P 500's 0.22% loss on the day. Elsewhere, the Dow lost 0.31%, while the tech-heavy Nasdaq lost 0.23%.

Heading into today, shares of the drug developer had gained 8.1% over the past month, outpacing the Medical sector's loss of 2.99% and the S&P 500's gain of 2.08% in that time.

GSK will be looking to display strength as it nears its next earnings release. On that day, GSK is projected to report earnings of $1.04 per share, which would represent a year-over-year decline of 4.59%. Meanwhile, our latest consensus estimate is calling for revenue of $9.63 billion, up 4.42% from the prior-year quarter.

For the full year, our Zacks Consensus Estimates are projecting earnings of $3.79 per share and revenue of $37.07 billion, which would represent changes of +9.54% and -6.64%, 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. With this in mind, we can consider positive estimate revisions a sign of optimism about 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.

Ranging from #1 (Strong Buy) to #5 (Strong Sell), the Zacks Rank system has a proven, outside-audited track record of outperformance, with #1 stocks returning an average of +25% annually since 1988. Over the past month, the Zacks Consensus EPS estimate has moved 1.05% lower. GSK is holding a Zacks Rank of #3 (Hold) right now.

In terms of valuation, GSK is currently trading at a Forward P/E ratio of 9.85. This represents a discount compared to its industry's average Forward P/E of 17.3.

Also, we should mention that GSK has a PEG ratio of 1.97. This metric is used similarly to the famous P/E ratio, but the PEG ratio also takes into account the stock's expected earnings growth rate. Medical - Biomedical and Genetics stocks are, on average, holding a PEG ratio of 2.16 based on yesterday's closing prices.

The Medical - Biomedical and Genetics industry is part of the Medical sector. This industry currently has a Zacks Industry Rank of 98, which puts it in the top 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.

Make sure to utilize to follow all of these stock-moving metrics, and more, in the coming trading sessions.

See More Zacks Research for These Tickers

Normally $25 each - click below to receive one report FREE:

GSK PLC Sponsored ADR (GSK) - free report >>

Published in