The most recent trading session ended with Merck (MRK) standing at $81.35, reflecting a +2.55% shift from the previouse trading day's closing. This move outpaced the S&P 500's daily gain of 0.55%. Meanwhile, the Dow experienced a rise of 0.25%, and the technology-dominated Nasdaq saw an increase of 0.63%.
Shares of the pharmaceutical company have depreciated by 1.37% over the course of the past month, underperforming the Medical sector's gain of 3.49% and the S&P 500's gain of 6.29%.
Market participants will be closely following the financial results of Merck in its upcoming release. On that day, Merck is projected to report earnings of $2.03 per share, which would represent a year-over-year decline of 10.96%. Meanwhile, the Zacks Consensus Estimate for revenue is projecting net sales of $15.69 billion, down 2.64% from the year-ago period.
For the full year, the Zacks Consensus Estimates are projecting earnings of $8.92 per share and revenue of $64.75 billion, which would represent changes of +16.6% and +0.91%, respectively, from the prior year.
Any recent changes to analyst estimates for Merck should also be noted by investors. These revisions help to show the ever-changing nature of near-term business trends. As such, positive estimate revisions reflect analyst optimism about the company's business and profitability.
Research indicates that these estimate revisions are directly correlated with near-term share price momentum. Investors can capitalize on this by using the Zacks Rank. This model considers these estimate changes and provides a simple, 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 has shifted 0.1% downward. At present, Merck boasts a Zacks Rank of #3 (Hold).
Looking at its valuation, Merck is holding a Forward P/E ratio of 8.89. For comparison, its industry has an average Forward P/E of 13.76, which means Merck is trading at a discount to the group.
Also, we should mention that MRK has a PEG ratio of 0.82. 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. As the market closed yesterday, the Large Cap Pharmaceuticals industry was having an average PEG ratio of 1.26.
The Large Cap Pharmaceuticals industry is part of the Medical sector. Currently, this industry holds a Zacks Industry Rank of 38, positioning it in the top 16% of all 250+ industries.
The Zacks Industry Rank evaluates the power of our distinct industry groups by determining the average Zacks Rank of the individual stocks forming the groups. Our research shows that the top 50% rated industries outperform the bottom half by a factor of 2 to 1.
To follow MRK in the coming trading sessions, be sure to utilize 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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