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Novo Nordisk (NVO) Gains As Market Dips: What You Should Know

The latest trading session saw Novo Nordisk (NVO) ending at $140.99, denoting a +0.13% adjustment from its last day's close. The stock's performance was ahead of the S&P 500's daily loss of 0.25%. Elsewhere, the Dow gained 0.77%, while the tech-heavy Nasdaq lost 0.79%.

Shares of the drugmaker witnessed a gain of 5.05% over the previous month, beating the performance of the Medical sector with its gain of 0.03% and the S&P 500's gain of 3.59%.

The upcoming earnings release of Novo Nordisk will be of great interest to investors. The company's earnings per share (EPS) are projected to be $0.81, reflecting a 28.57% increase from the same quarter last year. In the meantime, our current consensus estimate forecasts the revenue to be $9.86 billion, indicating a 24.28% growth compared to the corresponding quarter of the prior year.

For the full year, the Zacks Consensus Estimates are projecting earnings of $3.41 per share and revenue of $42.19 billion, which would represent changes of +26.3% and +25.14%, respectively, from the prior year.

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Additionally, investors should keep an eye on any recent revisions to analyst forecasts for Novo Nordisk. 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.

Our research reveals that these estimate alterations are directly linked with the stock price performance in the near future. 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, 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. Over the past month, the Zacks Consensus EPS estimate has shifted 0.39% downward. Novo Nordisk presently features a Zacks Rank of #3 (Hold).

In terms of valuation, Novo Nordisk is currently trading at a Forward P/E ratio of 41.33. This expresses a premium compared to the average Forward P/E of 14.44 of its industry.

It is also worth noting that NVO currently has a PEG ratio of 1.4. 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. Large Cap Pharmaceuticals stocks are, on average, holding a PEG ratio of 1.79 based on yesterday's closing prices.

The Large Cap Pharmaceuticals industry is part of the Medical sector. This group has a Zacks Industry Rank of 161, putting it in the bottom 37% of all 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.

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 Report

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Zacks Investment Research