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

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In the latest trading session, Merck (MRK - Free Report) closed at $70.86, marking a -1.07% move from the previous day. This change lagged the S&P 500's daily gain of 0.47%. Elsewhere, the Dow gained 0.95%, while the tech-heavy Nasdaq added 2.3%.

Prior to today's trading, shares of the pharmaceutical company had lost 12.65% over the past month. This has was narrower than the Medical sector's loss of 21.29% and the S&P 500's loss of 28.7% in that time.

MRK will be looking to display strength as it nears its next earnings release, which is expected to be April 28, 2020. On that day, MRK is projected to report earnings of $1.40 per share, which would represent year-over-year growth of 14.75%. Meanwhile, our latest consensus estimate is calling for revenue of $11.97 billion, up 10.69% from the prior-year quarter.

For the full year, our Zacks Consensus Estimates are projecting earnings of $5.72 per share and revenue of $49.82 billion, which would represent changes of +10.21% and +6.36%, respectively, from the prior year.

Investors might also notice recent changes to analyst estimates for MRK. These revisions typically reflect the latest short-term business trends, which can change frequently. 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. 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, which ranges from #1 (Strong Buy) to #5 (Strong Sell), has an impressive outside-audited track record of outperformance, with #1 stocks generating an average annual return of +25% since 1988. Over the past month, the Zacks Consensus EPS estimate remained stagnant. MRK is currently sporting a Zacks Rank of #3 (Hold).

Investors should also note MRK's current valuation metrics, including its Forward P/E ratio of 12.52. Its industry sports an average Forward P/E of 12.53, so we one might conclude that MRK is trading at a discount comparatively.

Investors should also note that MRK has a PEG ratio of 1.83 right now. 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. Large Cap Pharmaceuticals stocks are, on average, holding a PEG ratio of 1.79 based on yesterday's closing prices.

The Large Cap Pharmaceuticals industry is part of the Medical sector. This industry currently has a Zacks Industry Rank of 83, which puts it in the top 33% 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.

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


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