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

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Merck (MRK - Free Report) closed at $81.07 in the latest trading session, marking a +1.99% move from the prior day. This change outpaced the S&P 500's 0.37% gain on the day.

Coming into today, shares of the pharmaceutical company had gained 10.45% in the past month. In that same time, the Medical sector lost 4.25%, while the S&P 500 gained 2.13%.

Wall Street will be looking for positivity from MRK as it approaches its next earnings report date. This is expected to be October 28, 2021. In that report, analysts expect MRK to post earnings of $1.52 per share. This would mark a year-over-year decline of 12.64%. Our most recent consensus estimate is calling for quarterly revenue of $12.42 billion, down 1.03% from the year-ago period.

For the full year, our Zacks Consensus Estimates are projecting earnings of $5.67 per share and revenue of $48.25 billion, which would represent changes of -4.55% and +0.54%, respectively, from the prior year.

Investors might also notice recent changes to analyst estimates for MRK. These revisions typically reflect the latest short-term business trends, which can change frequently. As a result, we can interpret positive estimate revisions as a good sign for the company's 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 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 2.9% higher. MRK currently has a Zacks Rank of #3 (Hold).

Digging into valuation, MRK currently has a Forward P/E ratio of 14.01. For comparison, its industry has an average Forward P/E of 13.55, which means MRK is trading at a premium to the group.

Meanwhile, MRK's PEG ratio is currently 2.18. 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 industry currently had an average PEG ratio of 2.07 as of yesterday's close.

The Large Cap Pharmaceuticals industry is part of the Medical sector. This group has a Zacks Industry Rank of 67, putting it in the top 27% 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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