In the latest close session, Novo Nordisk (NVO) was up +1.89% at $71.01. The stock exceeded the S&P 500, which registered a gain of 0.28% for the day. Meanwhile, the Dow gained 0.43%, and the Nasdaq, a tech-heavy index, added 0.09%.
Shares of the drugmaker have depreciated by 11.48% over the course of the past month, underperforming the Medical sector's gain of 0.24%, and the S&P 500's gain of 4.37%.
The upcoming earnings release of Novo Nordisk will be of great interest to investors. The company is predicted to post an EPS of $0.93, indicating a 43.08% growth compared to the equivalent quarter last year. In the meantime, our current consensus estimate forecasts the revenue to be $11.83 billion, indicating a 20.47% growth compared to the corresponding quarter of the prior year.
For the full year, the Zacks Consensus Estimates are projecting earnings of $3.94 per share and revenue of $50.41 billion, which would represent changes of +20.12% and +19.76%, respectively, from the prior 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. As a result, upbeat changes in estimates indicate analysts' favorable outlook on the business health and profitability.
Our research suggests that these changes in estimates have a direct relationship with upcoming stock price performance. To utilize this, we have created the Zacks Rank, a proprietary model that integrates these estimate changes and provides a functional rating system.
The Zacks Rank system, spanning from #1 (Strong Buy) to #5 (Strong Sell), boasts an impressive track record of outperformance, audited externally, with #1 ranked stocks yielding an average annual return of +25% since 1988. Over the last 30 days, the Zacks Consensus EPS estimate has witnessed a 2.61% increase. At present, Novo Nordisk boasts a Zacks Rank of #3 (Hold).
In the context of valuation, Novo Nordisk is at present trading with a Forward P/E ratio of 17.71. For comparison, its industry has an average Forward P/E of 13.94, which means Novo Nordisk is trading at a premium to the group.
It is also worth noting that NVO currently has a PEG ratio of 1.36. 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. The Large Cap Pharmaceuticals industry had an average PEG ratio of 1.25 as trading concluded yesterday.
The Large Cap Pharmaceuticals industry is part of the Medical sector. This industry currently has a Zacks Industry Rank of 27, which puts it in the top 11% of all 250+ industries.
The Zacks Industry Rank assesses the strength of our separate industry groups by calculating the average Zacks Rank of the individual stocks contained within the groups. 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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Novo Nordisk A/S (NVO): Free Stock Analysis ReportThis article originally published on Zacks Investment Research (zacks.com).
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