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Merck (MRK) Gains But Lags Market: What You Should Know

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In the latest trading session, Merck (MRK - Free Report) closed at $74.79, marking a +0.01% move from the previous day. This change lagged the S&P 500's 0.3% gain on the day. Meanwhile, the Dow 0%, and the Nasdaq, a tech-heavy index, added 0.92%.

Prior to today's trading, shares of the pharmaceutical company had gained 3.72% over the past month. This has outpaced the Medical sector's loss of 2.51% and the S&P 500's loss of 4.37% in that time.

Wall Street will be looking for positivity from MRK as it approaches its next earnings report date. This is expected to be February 1, 2019. The company is expected to report EPS of $1.04, up 6.12% from the prior-year quarter. Meanwhile, the Zacks Consensus Estimate for revenue is projecting net sales of $11.05 billion, up 5.91% from the year-ago period.

MRK's full-year Zacks Consensus Estimates are calling for earnings of $4.34 per share and revenue of $42.29 billion. These results would represent year-over-year changes of +9.05% and +5.41%, respectively.

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. 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. Within the past 30 days, our consensus EPS projection has moved 1.32% higher. MRK is currently a Zacks Rank #2 (Buy).

In terms of valuation, MRK is currently trading at a Forward P/E ratio of 17.25. For comparison, its industry has an average Forward P/E of 14.49, which means MRK is trading at a premium to the group.

Meanwhile, MRK's PEG ratio is currently 2.03. 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. MRK's industry had an average PEG ratio of 1.98 as of yesterday's close.

The Large Cap Pharmaceuticals industry is part of the Medical sector. This group has a Zacks Industry Rank of 94, putting it in the top 37% 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.

Be sure to follow all of these stock-moving metrics, and many more, on Zacks.com.




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