Pfizer (PFE) Gains But Lags Market: What You Should Know

In the latest trading session, Pfizer (PFE) closed at $43.92, marking a +1.86% move from the previous day. This move lagged the S&P 500's daily gain of 2.15%. At the same time, the Dow added 2.17%, and the tech-heavy Nasdaq gained 2.89%.

Coming into today, shares of the drugmaker had gained 0.26% in the past month. In that same time, the Medical sector lost 5.75%, while the S&P 500 lost 5.16%.

PFE will be looking to display strength as it nears its next earnings release, which is expected to be October 30, 2018. On that day, PFE is projected to report earnings of $0.75 per share, which would represent year-over-year growth of 11.94%. Meanwhile, the Zacks Consensus Estimate for revenue is projecting net sales of $13.35 billion, up 1.36% from the year-ago period.

For the full year, our Zacks Consensus Estimates are projecting earnings of $2.99 per share and revenue of $53.83 billion, which would represent changes of +12.83% and +2.45%, respectively, from the prior year.

It is also important to note the recent changes to analyst estimates for PFE. These revisions typically reflect the latest short-term business trends, which can change frequently. With this in mind, we can consider positive estimate revisions a sign of optimism about the company's business outlook.

Our research shows that these estimate changes are directly correlated with near-term stock prices. 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 0.14% lower within the past month. PFE is currently sporting a Zacks Rank of #3 (Hold).

In terms of valuation, PFE is currently trading at a Forward P/E ratio of 14.44. Its industry sports an average Forward P/E of 15.94, so we one might conclude that PFE is trading at a discount comparatively.

Also, we should mention that PFE has a PEG ratio of 2.21. The PEG ratio is similar to the widely-used P/E ratio, but this metric also takes the company's expected earnings growth rate into account. PFE's industry had an average PEG ratio of 1.95 as of yesterday's close.

The Large Cap Pharmaceuticals industry is part of the Medical sector. This industry currently has a Zacks Industry Rank of 47, which puts it in the top 18% of all 250+ industries.

The Zacks Industry Rank gauges the strength of our individual industry groups by measuring the average Zacks Rank of the individual stocks 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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