In the latest close session, Merck (MRK) was up +1.28% at $85.11. This move outpaced the S&P 500's daily gain of 0.85%. Meanwhile, the Dow experienced a rise of 1.36%, and the technology-dominated Nasdaq saw an increase of 0.72%.
The stock of pharmaceutical company has risen by 1.6% in the past month, lagging the Medical sector's gain of 6.01% and the S&P 500's gain of 2.38%.
The investment community will be paying close attention to the earnings performance of Merck in its upcoming release. In that report, analysts expect Merck to post earnings of $2.37 per share. This would mark year-over-year growth of 50.96%. Meanwhile, our latest consensus estimate is calling for revenue of $17.19 billion, up 3.18% from the prior-year quarter.
For the annual period, the Zacks Consensus Estimates anticipate earnings of $8.93 per share and a revenue of $64.94 billion, signifying shifts of +16.73% and +1.21%, respectively, from the last year.
Additionally, investors should keep an eye on any recent revisions to analyst forecasts for Merck. These recent revisions tend to reflect the evolving nature of short-term business trends. As a result, upbeat changes in estimates indicate analysts' favorable outlook on the business health and profitability.
Empirical research indicates that these revisions in estimates have a direct correlation with impending stock price performance. To exploit this, we've formed the Zacks Rank, a quantitative model that includes these estimate changes and presents a viable rating system.
The Zacks Rank system, stretching from #1 (Strong Buy) to #5 (Strong Sell), has a noteworthy track record of outperforming, validated by third-party audits, with stocks rated #1 producing an average annual return of +25% since the year 1988. Over the past month, the Zacks Consensus EPS estimate has shifted 0.09% downward. At present, Merck boasts a Zacks Rank of #3 (Hold).
Valuation is also important, so investors should note that Merck has a Forward P/E ratio of 9.41 right now. For comparison, its industry has an average Forward P/E of 14.14, which means Merck is trading at a discount to the group.
It is also worth noting that MRK currently has a PEG ratio of 0.86. Comparable to the widely accepted P/E ratio, the PEG ratio also accounts for the company's projected earnings growth. The Large Cap Pharmaceuticals industry had an average PEG ratio of 1.57 as trading concluded yesterday.
The Large Cap Pharmaceuticals industry is part of the Medical sector. With its current Zacks Industry Rank of 159, this industry ranks in the bottom 36% of all industries, numbering over 250.
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.
Be sure to follow all of these stock-moving metrics, and many more, on Zacks.com.
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Merck & Co., Inc. (MRK): Free Stock Analysis ReportThis article originally published on Zacks Investment Research (zacks.com).
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