UK Markets closed

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

Zacks Equity Research

Merck (MRK) closed the most recent trading day at $84.45, moving +1.38% from the previous trading session. This move outpaced the S&P 500's daily gain of 0.97%. Meanwhile, the Dow gained 1.35%, and the Nasdaq, a tech-heavy index, added 1.39%.

Coming into today, shares of the pharmaceutical company had gained 5.6% in the past month. In that same time, the Medical sector gained 3.17%, while the S&P 500 gained 0.64%.

Investors will be hoping for strength from MRK as it approaches its next earnings release. In that report, analysts expect MRK to post earnings of $1.14 per share. This would mark year-over-year growth of 7.55%. Our most recent consensus estimate is calling for quarterly revenue of $10.91 billion, up 4.29% from the year-ago period.

For the full year, our Zacks Consensus Estimates are projecting earnings of $4.73 per share and revenue of $44.35 billion, which would represent changes of +8.99% and +4.86%, respectively, from the prior year.

Investors should also note any 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.

Our research shows that these estimate changes are directly correlated with near-term stock prices. 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. Over the past month, the Zacks Consensus EPS estimate has moved 0.18% higher. MRK is currently sporting a Zacks Rank of #2 (Buy).

Investors should also note MRK's current valuation metrics, including its Forward P/E ratio of 17.63. This valuation marks a premium compared to its industry's average Forward P/E of 14.56.

Investors should also note that MRK has a PEG ratio of 1.98 right now. 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. MRK's industry had an average PEG ratio of 2.11 as of yesterday's close.

The Large Cap Pharmaceuticals industry is part of the Medical sector. This group has a Zacks Industry Rank of 63, putting it in the top 25% 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.


Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report
 
Merck & Co., Inc. (MRK) : Free Stock Analysis Report
 
To read this article on Zacks.com click here.