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Novo Nordisk (NVO) Stock Sinks As Market Gains: What You Should Know

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In the latest trading session, Novo Nordisk (NVO - Free Report) closed at $65.29, marking a -2.61% move from the previous day. The stock's change was less than the S&P 500's daily gain of 0.54%. Meanwhile, the Dow experienced a rise of 0.52%, and the technology-dominated Nasdaq saw an increase of 0.74%.

Heading into today, shares of the drugmaker had lost 9.42% over the past month, lagging the Medical sector's loss of 2.12% and the S&P 500's gain of 4.2%.

Investors will be eagerly watching for the performance of Novo Nordisk in its upcoming earnings disclosure. The company is predicted to post an EPS of $0.93, indicating a 43.08% growth compared to the equivalent quarter last year. Alongside, our most recent consensus estimate is anticipating revenue of $11.88 billion, indicating a 20.99% upward movement from the same quarter last year.

For the full year, the Zacks Consensus Estimates project earnings of $3.98 per share and a revenue of $50.41 billion, demonstrating changes of +21.34% and +19.76%, respectively, from the preceding year.

Investors should also pay attention to any latest changes in analyst estimates for Novo Nordisk. These revisions help to show the ever-changing nature of near-term business trends. With this in mind, we can consider positive estimate revisions a sign of optimism about the business outlook.

Our research suggests that these changes in estimates have a direct relationship with upcoming stock price performance. 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 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. Over the last 30 days, the Zacks Consensus EPS estimate has witnessed a 2.89% increase. At present, Novo Nordisk boasts a Zacks Rank of #3 (Hold).

Investors should also note Novo Nordisk's current valuation metrics, including its Forward P/E ratio of 16.83. For comparison, its industry has an average Forward P/E of 14.24, which means Novo Nordisk is trading at a premium to the group.

Also, we should mention that NVO has a PEG ratio of 1.29. 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. As the market closed yesterday, the Large Cap Pharmaceuticals industry was having an average PEG ratio of 1.25.

The Large Cap Pharmaceuticals industry is part of the Medical sector. At present, this industry carries a Zacks Industry Rank of 73, placing it within the top 30% of over 250 industries.

The Zacks Industry Rank is ordered 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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