In the latest trading session, Merck (MRK) closed at $111.11, marking a +1.52% move from the previous day. The stock outperformed the S&P 500, which registered a daily gain of 1.16%. Elsewhere, the Dow gained 1.21%, while the tech-heavy Nasdaq added 1.18%.
The pharmaceutical company's shares have seen an increase of 4.2% over the last month, surpassing the Medical sector's loss of 1.32% and the S&P 500's loss of 0.42%.
Analysts and investors alike will be keeping a close eye on the performance of Merck in its upcoming earnings disclosure. The company's earnings report is set to go public on February 3, 2026. The company is expected to report EPS of $2.04, up 18.6% from the prior-year quarter. Meanwhile, the latest consensus estimate predicts the revenue to be $16.18 billion, indicating a 3.56% increase compared to the same quarter of the previous year.
Looking at the full year, the Zacks Consensus Estimates suggest analysts are expecting earnings of $8.96 per share and revenue of $64.8 billion. These totals would mark changes of +17.12% and 0%, respectively, from last year.
Investors should also take note of any recent adjustments to analyst estimates for Merck. These revisions typically reflect the latest short-term business trends, which can change frequently. As a result, we can interpret positive estimate revisions as a good sign for the business outlook.
Our research suggests that these changes in estimates have a direct relationship with upcoming stock price performance. 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. The Zacks Consensus EPS estimate has moved 9.98% lower within the past month. Right now, Merck possesses a Zacks Rank of #3 (Hold).
Valuation is also important, so investors should note that Merck has a Forward P/E ratio of 14.52 right now. This signifies a discount in comparison to the average Forward P/E of 14.81 for its industry.
It's also important to note that MRK currently trades at a PEG ratio of 1.27. 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. The Large Cap Pharmaceuticals industry currently had an average PEG ratio of 1.6 as of yesterday's close.
The Large Cap Pharmaceuticals industry is part of the Medical sector. This group has a Zacks Industry Rank of 100, putting it in the top 41% of all 250+ industries.
The Zacks Industry Rank gauges the strength of our 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.
Be sure to use Zacks.com to monitor all these stock-influencing metrics, and more, throughout the forthcoming trading sessions.
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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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