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Royal Philips (PHG) Gains But Lags Market: What You Should Know

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Royal Philips (PHG - Free Report) closed the most recent trading day at $47.73, moving +0.51% from the previous trading session. This move lagged the S&P 500's daily gain of 0.75%. Elsewhere, the Dow gained 0.76%, while the tech-heavy Nasdaq added 1.4%.

Prior to today's trading, shares of the medical imaging equipment maker had lost 9.92% over the past month. This has lagged the Computer and Technology sector's loss of 2.52% and the S&P 500's gain of 7% in that time.

Wall Street will be looking for positivity from PHG as it approaches its next earnings report date.

For the full year, our Zacks Consensus Estimates are projecting earnings of $2.42 per share and revenue of $22.73 billion, which would represent changes of +7.08% and +4.33%, respectively, from the prior year.

Investors should also note any recent changes to analyst estimates for PHG. 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. To benefit from this, we have developed the Zacks Rank, a proprietary model which takes these estimate changes into account and provides an actionable rating system.

The Zacks Rank system, which ranges from #1 (Strong Buy) to #5 (Strong Sell), has an impressive outside-audited track record of outperformance, with #1 stocks generating an average annual return of +25% since 1988. Over the past month, the Zacks Consensus EPS estimate remained stagnant. PHG is holding a Zacks Rank of #2 (Buy) right now.

Valuation is also important, so investors should note that PHG has a Forward P/E ratio of 19.67 right now. For comparison, its industry has an average Forward P/E of 20.38, which means PHG is trading at a discount to the group.

Meanwhile, PHG's PEG ratio is currently 1.94. This popular metric is similar to the widely-known P/E ratio, with the difference being that the PEG ratio also takes into account the company's expected earnings growth rate. Electronics - Miscellaneous Products stocks are, on average, holding a PEG ratio of 1.94 based on yesterday's closing prices.

The Electronics - Miscellaneous Products industry is part of the Computer and Technology sector. This group has a Zacks Industry Rank of 110, putting it in the top 44% 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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