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Mallinckrodt (MNK) Stock Sinks As Market Gains: What You Should Know

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Mallinckrodt (MNK - Free Report) closed the most recent trading day at $22.53, moving -1.18% from the previous trading session. This change lagged the S&P 500's daily gain of 0.22%. At the same time, the Dow added 0.15%, and the tech-heavy Nasdaq gained 0.6%.

Coming into today, shares of the specialty pharmaceutical company had gained 1.83% in the past month. In that same time, the Medical sector lost 0.07%, while the S&P 500 gained 2.39%.

MNK will be looking to display strength as it nears its next earnings release, which is expected to be May 7, 2019. In that report, analysts expect MNK to post earnings of $1.77 per share. This would mark year-over-year growth of 35.11%. Meanwhile, the Zacks Consensus Estimate for revenue is projecting net sales of $775.39 million, up 35.41% from the year-ago period.

MNK's full-year Zacks Consensus Estimates are calling for earnings of $8.15 per share and revenue of $3.25 billion. These results would represent year-over-year changes of +1.75% and +21.39%, respectively.

Any recent changes to analyst estimates for MNK 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.

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 0.25% higher. MNK currently has a Zacks Rank of #1 (Strong Buy).

Digging into valuation, MNK currently has a Forward P/E ratio of 2.8. For comparison, its industry has an average Forward P/E of 6.35, which means MNK is trading at a discount to the group.

Meanwhile, MNK's PEG ratio is currently 0.23. 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 1.16 based on yesterday's closing prices.

The Medical - Generic Drugs industry is part of the Medical sector. This group has a Zacks Industry Rank of 91, putting it in the top 36% 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.

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