Merck (MRK - Free Report) closed at $76.29 in the latest trading session, marking a -0.88% move from the prior day. This change lagged the S&P 500's daily loss of 0.36%. Elsewhere, the Dow lost 0.65%, while the tech-heavy Nasdaq added 0.15%.
Wall Street will be looking for positivity from MRK as it approaches its next earnings report date. On that day, MRK is projected to report earnings of $1.08 per share, which would represent a year-over-year decline of 16.92%. Meanwhile, our latest consensus estimate is calling for revenue of $10.84 billion, down 7.85% from the prior-year quarter.
For the full year, our Zacks Consensus Estimates are projecting earnings of $5.36 per share and revenue of $47.31 billion, which would represent changes of +3.28% and +0.99%, respectively, from the prior year.
It is also important to note the 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.
Research indicates that these estimate revisions are directly correlated with near-term share price momentum. 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.
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. Over the past month, the Zacks Consensus EPS estimate has moved 0.09% higher. MRK currently has a Zacks Rank of #3 (Hold).
In terms of valuation, MRK is currently trading at a Forward P/E ratio of 14.36. Its industry sports an average Forward P/E of 15.1, so we one might conclude that MRK is trading at a discount comparatively.
It is also worth noting that MRK currently has a PEG ratio of 2.13. The PEG ratio is similar to the widely-used P/E ratio, but this metric also takes the company's expected earnings growth rate into account. The Large Cap Pharmaceuticals was holding an average PEG ratio of 2.08 at yesterday's closing price.
The Large Cap Pharmaceuticals industry is part of the Medical sector. This group has a Zacks Industry Rank of 15, putting it in the top 6% 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.