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Merck (MRK) Dips More Than Broader Markets: What You Should Know

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In the latest trading session, Merck (MRK - Free Report) closed at $78.53, marking a -1.13% move from the previous day. This move lagged the S&P 500's daily loss of 0.06%. At the same time, the Dow lost 0.1%, and the tech-heavy Nasdaq lost 0.1%.

Coming into today, shares of the pharmaceutical company had lost 2.53% in the past month. In that same time, the Medical sector lost 2.31%, while the S&P 500 gained 4.3%.

Wall Street will be looking for positivity from MRK as it approaches its next earnings report date. This is expected to be April 30, 2019. On that day, MRK is projected to report earnings of $1.04 per share, which would represent a year-over-year decline of 0.95%. Meanwhile, the Zacks Consensus Estimate for revenue is projecting net sales of $10.36 billion, up 3.25% from the year-ago period.

MRK's full-year Zacks Consensus Estimates are calling for earnings of $4.65 per share and revenue of $44.33 billion. These results would represent year-over-year changes of +7.14% and +4.8%, respectively.

Investors might also notice recent changes to analyst estimates for MRK. Recent revisions tend to reflect the latest near-term business trends. With this in mind, we can consider positive estimate revisions a sign of optimism about the company's business outlook.

Research indicates that these estimate revisions are directly correlated with near-term share price momentum. 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. Within the past 30 days, our consensus EPS projection has moved 0.07% higher. MRK is currently a Zacks Rank #2 (Buy).

Digging into valuation, MRK currently has a Forward P/E ratio of 17.08. Its industry sports an average Forward P/E of 14.97, so we one might conclude that MRK is trading at a premium comparatively.

It is also worth noting that MRK currently has a PEG ratio of 1.93. 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 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 83, putting it in the top 33% 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.

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




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