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Merck (MRK) Stock Sinks As Market Gains: What You Should Know
Merck (MRK - Free Report) closed the most recent trading day at $105.54, moving -0.29% from the previous trading session. This change lagged the S&P 500's 1.3% gain on the day. At the same time, the Dow added 0.98%, and the tech-heavy Nasdaq gained 7.48%.
Coming into today, shares of the pharmaceutical company had lost 3.35% in the past month. In that same time, the Medical sector lost 3.29%, while the S&P 500 lost 2.95%.
Merck will be looking to display strength as it nears its next earnings release, which is expected to be April 27, 2023. The company is expected to report EPS of $1.42, down 33.64% from the prior-year quarter. Meanwhile, the Zacks Consensus Estimate for revenue is projecting net sales of $13.8 billion, down 13.2% from the year-ago period.
For the full year, our Zacks Consensus Estimates are projecting earnings of $6.87 per share and revenue of $58.51 billion, which would represent changes of -8.16% and -1.3%, respectively, from the prior year.
Investors should also note any recent changes to analyst estimates for Merck. Recent revisions tend to reflect the latest near-term business trends. 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. 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.
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. The Zacks Consensus EPS estimate has moved 0.05% higher within the past month. Merck is currently a Zacks Rank #3 (Hold).
Valuation is also important, so investors should note that Merck has a Forward P/E ratio of 15.4 right now. This represents a premium compared to its industry's average Forward P/E of 13.89.
Investors should also note that MRK has a PEG ratio of 1.94 right now. The PEG ratio is similar to the widely-used P/E ratio, but this metric also takes the company's expected earnings growth rate into account. Large Cap Pharmaceuticals stocks are, on average, holding a PEG ratio of 1.62 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 156, putting it in the bottom 39% of all 250+ industries.
The Zacks Industry Rank includes is listed in order from best to worst in terms of the average Zacks Rank of the individual companies within each of these sectors. Our research shows that the top 50% rated industries outperform the bottom half by a factor of 2 to 1.
To follow MRK in the coming trading sessions, be sure to utilize Zacks.com.