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Merck (MRK) Outpaces Stock Market Gains: What You Should Know

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In the latest trading session, Merck (MRK - Free Report) closed at $91.64, marking a +0.42% move from the previous day. This change outpaced the S&P 500's 0.35% gain on the day. At the same time, the Dow added 0.24%, and the tech-heavy Nasdaq gained 0.56%.

Prior to today's trading, shares of the pharmaceutical company had gained 2.82% over the past month. This has lagged the Medical sector's gain of 3.32% and the S&P 500's gain of 4.69% in that time.

Investors will be hoping for strength from MRK as it approaches its next earnings release, which is expected to be February 5, 2020. The company is expected to report EPS of $1.14, up 9.62% from the prior-year quarter. Our most recent consensus estimate is calling for quarterly revenue of $12.14 billion, up 10.35% from the year-ago period.

Any recent changes to analyst estimates for MRK should also be noted by investors. These revisions help to show the ever-changing nature of near-term business trends. With this in mind, we can consider positive estimate revisions a sign of optimism about 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. Within the past 30 days, our consensus EPS projection remained stagnant. MRK is currently a Zacks Rank #3 (Hold).

Digging into valuation, MRK currently has a Forward P/E ratio of 16.62. For comparison, its industry has an average Forward P/E of 15.47, which means MRK is trading at a premium to the group.

We can also see that MRK currently has a PEG ratio of 1.86. 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. The Large Cap Pharmaceuticals industry currently 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 industry currently has a Zacks Industry Rank of 46, which puts it in the top 19% 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.

You can find more information on all of these metrics, and much more, on Zacks.com.


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