In the latest close session, Novo Nordisk (NVO) was up +2.95% at $81.05. This move outpaced the S&P 500’s daily gain of 0.38%. On the other hand, the Dow registered a gain of 0.24%, and the technology-centric Nasdaq increased by 0.24%.
Heading into today, shares of the drugmaker had gained 22.23% over the past month, outpacing the Medical sector’s gain of 4.64% and the S&P 500’s gain of 6.6%.
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The upcoming earnings release of Novo Nordisk will be of great interest to investors. The company is forecasted to report an EPS of $0.88, showcasing a 35.38% upward movement from the corresponding quarter of the prior year. In the meantime, our current consensus estimate forecasts the revenue to be $11.73 billion, indicating a 19.45% growth compared to the corresponding quarter of the prior year.
Looking at the full year, the Zacks Consensus Estimates suggest analysts are expecting earnings of $3.84 per share and revenue of $47.95 billion. These totals would mark changes of +17.07% and +13.91%, respectively, from last year.
Any recent changes to analyst estimates for Novo Nordisk 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 business outlook.
Based on our research, we believe these estimate revisions are directly related to near-term stock moves. We developed the Zacks Rank to capitalize on this phenomenon. Our system takes these estimate changes into account and delivers a clear, actionable rating model.
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. Over the last 30 days, the Zacks Consensus EPS estimate has moved 0.42% lower. Novo Nordisk is currently sporting a Zacks Rank of #3 (Hold).
In terms of valuation, Novo Nordisk is currently trading at a Forward P/E ratio of 20.52. This denotes a premium relative to the industry average Forward P/E of 13.81.
Meanwhile, NVO’s PEG ratio is currently 1.42. The PEG ratio bears resemblance to the frequently used P/E ratio, but this parameter also includes the company’s expected earnings growth trajectory. The average PEG ratio for the Large Cap Pharmaceuticals industry stood at 1.27 at the close of the market yesterday.
The Large Cap Pharmaceuticals industry is part of the Medical sector. At present, this industry carries a Zacks Industry Rank of 36, placing it within the top 15% of over 250 industries.
