Merck (MRK) closed the most recent trading day at $117.84, moving -0.63% from the previous trading session. This change was narrower than the S&P 500’s 1.73% loss on the day. On the other hand, the Dow registered a loss of 1.01%, and the technology-centric Nasdaq decreased by 2.55%.
Shares of the pharmaceutical company have appreciated by 4.1% over the course of the past month, underperforming the Medical sector’s gain of 5.85% and the S&P 500’s gain of 6.22%.
The upcoming earnings release of Merck will be of great interest to investors. On that day, Merck is projected to report earnings of $1.77 per share, which would represent a year-over-year decline of 16.9%. Our most recent consensus estimate is calling for quarterly revenue of $16.48 billion, up 3.24% from the year-ago period.
For the annual period, the Zacks Consensus Estimates anticipate earnings of $8.07 per share and a revenue of $64.14 billion, signifying shifts of +434.44% and +6.69%, respectively, from the last year.
It is also important to note the recent changes to analyst estimates for Merck. 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.
Our research shows that these estimate changes are directly correlated with near-term stock prices. 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, 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 has shifted 0.41% downward. Merck presently features a Zacks Rank of #3 (Hold).
Investors should also note Merck’s current valuation metrics, including its Forward P/E ratio of 14.7. This represents a discount compared to its industry’s average Forward P/E of 16.01.
Meanwhile, MRK’s PEG ratio is currently 1.63. The PEG ratio is akin to the commonly utilized P/E ratio, but this measure also incorporates the company’s anticipated earnings growth rate. By the end of yesterday’s trading, the Large Cap Pharmaceuticals industry had an average PEG ratio of 1.68.
The Large Cap Pharmaceuticals industry is part of the Medical sector. With its current Zacks Industry Rank of 83, this industry ranks in the top 33% of all industries, numbering over 250.
The Zacks Industry Rank evaluates the power of our distinct industry groups by determining the average Zacks Rank of the individual stocks forming the groups. Our research shows that the top 50% rated industries outperform the bottom half by a factor of 2 to 1.
Remember to apply Zacks.com to follow these and more stock-moving metrics during the upcoming trading sessions.
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