In the latest close session, Merck (MRK) was down 3.31% at $78.28. This change lagged the S&P 500's daily loss of 0.84%. Meanwhile, the Dow lost 0.7%, and the Nasdaq, a tech-heavy index, lost 0.91%.
The pharmaceutical company's stock has climbed by 6.44% in the past month, exceeding the Medical sector's loss of 0% and the S&P 500's gain of 1.44%.
The upcoming earnings release of Merck will be of great interest to investors. The company is forecasted to report an EPS of $2.03, showcasing a 10.96% downward movement from the corresponding quarter of the prior year. Simultaneously, our latest consensus estimate expects the revenue to be $15.69 billion, showing a 2.64% drop compared to the year-ago quarter.
For the entire fiscal year, the Zacks Consensus Estimates are projecting earnings of $8.92 per share and a revenue of $64.75 billion, representing changes of +16.6% and +0.91%, respectively, from the prior year.
Investors should also take note of any recent adjustments to analyst estimates for Merck. These revisions help to show the ever-changing nature of near-term business trends. As a result, we can interpret positive estimate revisions as a good sign for the business outlook.
Our research shows that these estimate changes are directly correlated with near-term stock prices. 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 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. Over the past month, there's been no change in the Zacks Consensus EPS estimate. As of now, Merck holds a Zacks Rank of #3 (Hold).
In the context of valuation, Merck is at present trading with a Forward P/E ratio of 9.08. This signifies a discount in comparison to the average Forward P/E of 13.65 for its industry.
Investors should also note that MRK has a PEG ratio of 0.84 right now. The PEG ratio is akin to the commonly utilized P/E ratio, but this measure also incorporates the company's anticipated earnings growth rate. As of the close of trade yesterday, the Large Cap Pharmaceuticals industry held an average PEG ratio of 1.27.
The Large Cap Pharmaceuticals industry is part of the Medical sector. Currently, this industry holds a Zacks Industry Rank of 57, positioning it in the top 24% of all 250+ industries.
The Zacks Industry Rank assesses the vigor of our specific industry groups by computing the average Zacks Rank of the individual stocks incorporated in 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 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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