Novo Nordisk (NVO) ended the recent trading session at $67.10, demonstrating a -1.67% swing from the preceding day's closing price. The stock outperformed the S&P 500, which registered a daily loss of 4.84%. Elsewhere, the Dow lost 3.98%, while the tech-heavy Nasdaq lost 5.97%.
Prior to today's trading, shares of the drugmaker had lost 24.9% over the past month. This has lagged the Medical sector's loss of 4.6% and the S&P 500's loss of 4.7% in that time.
Analysts and investors alike will be keeping a close eye on the performance of Novo Nordisk in its upcoming earnings disclosure. The company is predicted to post an EPS of $0.92, indicating a 10.84% growth compared to the equivalent quarter last year. Meanwhile, our latest consensus estimate is calling for revenue of $11.33 billion, up 19.06% from the prior-year quarter.
In terms of the entire fiscal year, the Zacks Consensus Estimates predict earnings of $3.86 per share and a revenue of $49.71 billion, indicating changes of +17.68% and +18.07%, respectively, from the former year.
Additionally, investors should keep an eye on any recent revisions to analyst forecasts for Novo Nordisk. Such recent modifications usually signify the changing landscape of near-term business trends. Hence, positive alterations in estimates signify analyst optimism regarding the company's business and profitability.
Based on our research, we believe these estimate revisions are directly related to near-team stock moves. 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, ranging from #1 (Strong Buy) to #5 (Strong Sell), possesses a remarkable history of outdoing, externally audited, with #1 stocks returning an average annual gain of +25% since 1988. The Zacks Consensus EPS estimate has moved 0.62% lower within the past month. Right now, Novo Nordisk possesses a Zacks Rank of #3 (Hold).
Looking at valuation, Novo Nordisk is presently trading at a Forward P/E ratio of 17.69. For comparison, its industry has an average Forward P/E of 13.53, which means Novo Nordisk is trading at a premium to the group.
Also, we should mention that NVO has a PEG ratio of 1.08. 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. By the end of yesterday's trading, the Large Cap Pharmaceuticals industry had an average PEG ratio of 1.33.
The Large Cap Pharmaceuticals industry is part of the Medical sector. This industry, currently bearing a Zacks Industry Rank of 69, finds itself in the top 28% echelons 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.
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This article originally published on Zacks Investment Research (zacks.com).
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