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

In the latest trading session, GlaxoSmithKline (GSK) closed at $45.10, marking a +0.49% move from the previous day. The stock outpaced the S&P 500's daily loss of 1.89%. Elsewhere, the Dow lost 1.3%, while the tech-heavy Nasdaq lost 0.17%.

Prior to today's trading, shares of the drug developer had gained 2.56% over the past month. This has outpaced the Medical sector's loss of 7.68% and the S&P 500's loss of 1.79% in that time.

GlaxoSmithKline will be looking to display strength as it nears its next earnings release. In that report, analysts expect GlaxoSmithKline to post earnings of $0.63 per share. This would mark year-over-year growth of 1.61%. Meanwhile, our latest consensus estimate is calling for revenue of $12.62 billion, up 9.36% from the prior-year quarter.

Investors should also note any recent changes to analyst estimates for GlaxoSmithKline. 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.

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.

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. The Zacks Consensus EPS estimate has moved 1.1% higher within the past month. GlaxoSmithKline is currently sporting a Zacks Rank of #3 (Hold).

Valuation is also important, so investors should note that GlaxoSmithKline has a Forward P/E ratio of 13.67 right now. This valuation marks a premium compared to its industry's average Forward P/E of 13.03.

Also, we should mention that GSK has a PEG ratio of 2.44. 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. Large Cap Pharmaceuticals stocks are, on average, holding a PEG ratio of 2 based on yesterday's closing prices.

The Large Cap Pharmaceuticals industry is part of the Medical sector. This industry currently has a Zacks Industry Rank of 223, which puts it in the bottom 13% 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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