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

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Merck (MRK - Free Report) closed at $81.60 in the latest trading session, marking a +0.46% move from the prior day. This change lagged the S&P 500's 0.7% gain on the day. At the same time, the Dow added 0.58%, and the tech-heavy Nasdaq gained 0.69%.

Prior to today's trading, shares of the pharmaceutical company had gained 3.45% over the past month. This has outpaced the Medical sector's gain of 1.59% and the S&P 500's gain of 1.95% in that time.

Wall Street will be looking for positivity from MRK as it approaches its next earnings report date. On that day, MRK is projected to report earnings of $1.06 per share, which would represent year-over-year growth of 0.95%. Meanwhile, our latest consensus estimate is calling for revenue of $10.50 billion, up 4.57% from the prior-year quarter.

Looking at the full year, our Zacks Consensus Estimates suggest analysts are expecting earnings of $4.65 per share and revenue of $44.38 billion. These totals would mark changes of +7.14% and +4.93%, respectively, from last year.

It is also important to note the recent changes to analyst estimates for MRK. These recent revisions tend to reflect the evolving nature of short-term business trends. As a result, we can interpret positive estimate revisions as a good sign for the company's business outlook.

Based on our research, we believe these estimate revisions are directly related to near-team stock moves. Investors can capitalize on this by using the Zacks Rank. This model considers these estimate changes and provides a simple, 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. The Zacks Consensus EPS estimate has moved 0.14% lower within the past month. 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 17.48. For comparison, its industry has an average Forward P/E of 15.19, which means MRK is trading at a premium to the group.

Investors should also note that MRK has a PEG ratio of 1.99 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. MRK's industry had an average PEG ratio of 2.1 as of yesterday's close.

The Large Cap Pharmaceuticals industry is part of the Medical sector. This group has a Zacks Industry Rank of 148, putting it in the bottom 42% 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.

To follow MRK in the coming trading sessions, be sure to utilize Zacks.com.




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