Merck (MRK) ended the recent trading session at $80.32, demonstrating a -1.27% swing from the preceding day's closing price. The stock trailed the S&P 500, which registered a daily loss of 0.27%.
Heading into today, shares of the pharmaceutical company had gained 6.16% outpacing the Medical sector's gain of 4.77% and lagging the S&P 500's gain of 6.9%.
Analysts and investors alike will be keeping a close eye on the performance of Merck in its upcoming earnings disclosure. In that report, analysts expect Merck to post earnings of $2.03 per share. This would mark a year-over-year decline of 10.96%. Simultaneously, our latest consensus estimate expects the revenue to be $15.69 billion, showing a 2.64% drop compared to the year-ago quarter.
MRK's full-year Zacks Consensus Estimates are calling for earnings of $8.92 per share and revenue of $64.75 billion. These results would represent year-over-year changes of +16.6% and +0.91%, respectively.
Additionally, investors should keep an eye on any recent revisions to analyst forecasts for Merck. Such recent modifications usually signify the changing landscape of near-term business trends. With this in mind, we can consider positive estimate revisions a sign of optimism about the business outlook.
Empirical research indicates that these revisions in estimates have a direct correlation with impending 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 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 moved 0.1% lower. As of now, Merck holds a Zacks Rank of #3 (Hold).
Digging into valuation, Merck currently has a Forward P/E ratio of 9.12. This denotes a discount relative to the industry average Forward P/E of 13.83.
It's also important to note that MRK currently trades at a PEG ratio of 0.84. Comparable to the widely accepted P/E ratio, the PEG ratio also accounts for the company's projected earnings growth. Large Cap Pharmaceuticals stocks are, on average, holding a PEG ratio of 1.26 based on yesterday's closing prices.
The Large Cap Pharmaceuticals industry is part of the Medical sector. This group has a Zacks Industry Rank of 54, putting it in the top 22% 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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Merck & Co., Inc. (MRK): Free Stock Analysis ReportThis article originally published on Zacks Investment Research (zacks.com).
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