Novo Nordisk (NVO) closed the most recent trading day at $69.30, moving -1.23% from the previous trading session. The stock's performance was ahead of the S&P 500's daily loss of 1.97%. At the same time, the Dow lost 1.69%, and the tech-heavy Nasdaq lost 2.7%.
The drugmaker's stock has dropped by 21.36% in the past month, falling short of the Medical sector's loss of 2.45% and the S&P 500's loss of 2.79%.
The investment community will be paying close attention to the earnings performance of Novo Nordisk in its upcoming release. On that day, Novo Nordisk is projected to report earnings of $0.94 per share, which would represent year-over-year growth of 13.25%. Alongside, our most recent consensus estimate is anticipating revenue of $11.29 billion, indicating a 18.67% upward movement from the same quarter last year.
In terms of the entire fiscal year, the Zacks Consensus Estimates predict earnings of $3.93 per share and a revenue of $49.89 billion, indicating changes of +19.82% and +18.52%, respectively, from the former year.
Investors should also take note of any recent adjustments to analyst estimates for Novo Nordisk. Recent revisions tend to reflect the latest near-term business trends. As a result, we can interpret positive estimate revisions as a good sign for the company's business outlook.
Empirical research indicates that these revisions in estimates have a direct correlation with impending stock price performance. 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 varies between #1 (Strong Buy) and #5 (Strong Sell), carries an impressive track record of exceeding expectations, confirmed by external audits, with stocks at #1 delivering an average annual return of +25% since 1988. The Zacks Consensus EPS estimate has moved 2.24% higher within the past month. Novo Nordisk currently has a Zacks Rank of #2 (Buy).
In terms of valuation, Novo Nordisk is currently trading at a Forward P/E ratio of 17.86. Its industry sports an average Forward P/E of 14.12, so one might conclude that Novo Nordisk is trading at a premium comparatively.
It's also important to note that NVO currently trades at a PEG ratio of 0.74. 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 1.33 as trading concluded yesterday.
The Large Cap Pharmaceuticals industry is part of the Medical sector. At present, this industry carries a Zacks Industry Rank of 42, placing it within the top 17% 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.
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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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