Back to top

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

Read MoreHide Full Article

In the latest trading session, Merck (MRK - Free Report) closed at $82.48, marking a +0.02% move from the previous day. The stock lagged the S&P 500's daily gain of 0.47%. Elsewhere, the Dow gained 0.3%, while the tech-heavy Nasdaq added 1.05%.

Prior to today's trading, shares of the pharmaceutical company had gained 5.27% over the past month. This has outpaced the Medical sector's gain of 1.73% and the S&P 500's loss of 0.08% in that time.

Wall Street will be looking for positivity from MRK as it approaches its next earnings report date. In that report, analysts expect MRK to post earnings of $1.14 per share. This would mark year-over-year growth of 7.55%. Meanwhile, our latest consensus estimate is calling for revenue of $10.91 billion, up 4.29% from the prior-year quarter.

For the full year, our Zacks Consensus Estimates are projecting earnings of $4.73 per share and revenue of $44.35 billion, which would represent changes of +8.99% and +4.86%, respectively, from the prior year.

Any recent changes to analyst estimates for MRK should also be noted by investors. 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.

Based on our research, we believe these estimate revisions are directly related to near-team stock moves. We developed the Zacks Rank to capitalize on this phenomenon. Our system takes these estimate changes into account and delivers a clear, actionable rating model.

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 0.18% higher. MRK currently has a Zacks Rank of #2 (Buy).

Looking at its valuation, MRK is holding a Forward P/E ratio of 17.45. This represents a premium compared to its industry's average Forward P/E of 14.56.

Investors should also note that MRK has a PEG ratio of 1.95 right now. This metric is used similarly to the famous P/E ratio, but the PEG ratio also takes into account the stock's expected earnings growth rate. MRK's industry had an average PEG ratio of 2.11 as of yesterday's close.

The Large Cap Pharmaceuticals industry is part of the Medical sector. This industry currently has a Zacks Industry Rank of 57, which puts it in the top 23% 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.

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


In-Depth Zacks Research for the Tickers Above


Normally $25 each - click below to receive one report FREE:


Merck & Co., Inc. (MRK) - free report >>

Published in