In the latest trading session, Merck (MRK) closed at $79.29, marking a +1.29% move from the previous day. The stock exceeded the S&P 500, which registered a loss of 0.03% for the day. On the other hand, the Dow registered a loss of 0.11%, and the technology-centric Nasdaq increased by 0.13%.
The stock of pharmaceutical company has risen by 0.4% in the past month, lagging the Medical sector's gain of 1.25% and the S&P 500's gain of 0.6%.
Analysts and investors alike will be keeping a close eye on the performance of Merck in its upcoming earnings disclosure. The company's earnings per share (EPS) are projected to be $2.03, reflecting a 10.96% decrease from the same quarter last year. Meanwhile, our latest consensus estimate is calling for revenue of $15.69 billion, down 2.64% from the prior-year quarter.
In terms of the entire fiscal year, the Zacks Consensus Estimates predict earnings of $8.92 per share and a revenue of $64.75 billion, indicating changes of +16.6% and +0.91%, respectively, from the former year.
Investors should also take note of any recent adjustments to analyst estimates for Merck. These latest adjustments often mirror the shifting dynamics of short-term business patterns. With this in mind, we can consider positive estimate revisions a sign of optimism about the business outlook.
Our research suggests that these changes in estimates have a direct relationship with upcoming 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, running from #1 (Strong Buy) to #5 (Strong Sell), holds an admirable track record of superior performance, independently audited, with #1 stocks contributing an average annual return of +25% since 1988. Over the past month, the Zacks Consensus EPS estimate remained stagnant. Merck currently has a Zacks Rank of #3 (Hold).
Digging into valuation, Merck currently has a Forward P/E ratio of 8.78. This represents a discount compared to its industry average Forward P/E of 13.53.
It is also worth noting that MRK currently has a PEG ratio of 0.81. Comparable to the widely accepted P/E ratio, the PEG ratio also accounts for the company's projected earnings growth. MRK's industry had an average PEG ratio of 1.23 as of yesterday's close.
The Large Cap Pharmaceuticals industry is part of the Medical sector. This industry currently has a Zacks Industry Rank of 59, which puts it in the top 24% of all 250+ industries.
The Zacks Industry Rank assesses the strength of our separate industry groups by calculating the average Zacks Rank of the individual stocks contained within the groups. Our research shows that the top 50% rated industries outperform the bottom half by a factor of 2 to 1.
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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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