Merck (MRK - Free Report) closed the most recent trading day at $90.92, moving -0.12% from the previous trading session. This move lagged the S&P 500's daily gain of 0.3%. Meanwhile, the Dow gained 0.27%, and the Nasdaq, a tech-heavy index, added 0.3%.
Prior to today's trading, shares of the pharmaceutical company had gained 4.58% over the past month. This has outpaced the Medical sector's gain of 3.08% and the S&P 500's gain of 2.69% in that time.
MRK will be looking to display strength as it nears its next earnings release, which is expected to be February 5, 2020. The company is expected to report EPS of $1.25, up 20.19% from the prior-year quarter. Meanwhile, our latest consensus estimate is calling for revenue of $12.14 billion, up 10.35% from the prior-year quarter.
It is also important to note the recent changes to analyst estimates for MRK. 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.
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.
The Zacks Rank system ranges from #1 (Strong Buy) to #5 (Strong Sell). It has a remarkable, outside-audited track record of success, with #1 stocks delivering an average annual return of +25% since 1988. The Zacks Consensus EPS estimate remained stagnant within the past month. MRK is holding a Zacks Rank of #3 (Hold) right now.
Investors should also note MRK's current valuation metrics, including its Forward P/E ratio of 17.67. For comparison, its industry has an average Forward P/E of 15.63, which means MRK is trading at a premium to the group.
Investors should also note that MRK has a PEG ratio of 1.98 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. The Large Cap Pharmaceuticals industry currently had an average PEG ratio of 2.2 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 24, which puts it in the top 10% 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.
You can find more information on all of these metrics, and much more, on Zacks.com.