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Merck (MRK) Outpaces Stock Market Gains: What You Should Know

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Merck (MRK - Free Report) closed the most recent trading day at $81.94, moving +1.59% from the previous trading session. This move outpaced the S&P 500's daily gain of 0.83%.

Prior to today's trading, shares of the pharmaceutical company had gained 7.03% over the past month. This has outpaced the Medical sector's loss of 10.16% and the S&P 500's loss of 3.68% in that time.

Investors will be hoping for strength from MRK as it approaches its next earnings release, which is expected to be October 28, 2021. On that day, MRK is projected to report earnings of $1.52 per share, which would represent a year-over-year decline of 12.64%. Our most recent consensus estimate is calling for quarterly revenue of $12.43 billion, down 0.94% from the year-ago period.

Looking at the full year, our Zacks Consensus Estimates suggest analysts are expecting earnings of $5.52 per share and revenue of $47.2 billion. These totals would mark changes of -7.07% and -1.66%, respectively, from last year.

Investors should also note any recent changes to analyst estimates for MRK. Recent revisions tend to reflect the latest near-term business trends. As such, positive estimate revisions reflect analyst optimism about the company's business and profitability.

Based on our research, we believe these estimate revisions are directly related to near-team stock moves. To benefit from this, we have developed the Zacks Rank, a proprietary model which takes these estimate changes into account and provides an actionable rating system.

Ranging from #1 (Strong Buy) to #5 (Strong Sell), the Zacks Rank system has a proven, outside-audited track record of outperformance, with #1 stocks returning an average of +25% annually since 1988. Over the past month, the Zacks Consensus EPS estimate has moved 0.21% higher. MRK is currently sporting a Zacks Rank of #3 (Hold).

In terms of valuation, MRK is currently trading at a Forward P/E ratio of 14.61. This represents a premium compared to its industry's average Forward P/E of 13.29.

Also, we should mention that MRK has a PEG ratio of 2.37. This popular metric is similar to the widely-known P/E ratio, with the difference being that the PEG ratio also takes into account the company's expected earnings growth rate. The Large Cap Pharmaceuticals was holding an average PEG ratio of 2.03 at yesterday's closing price.

The Large Cap Pharmaceuticals industry is part of the Medical sector. This industry currently has a Zacks Industry Rank of 70, which puts it in the top 28% 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.

You can find more information on all of these metrics, and much more, on Zacks.com.


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