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Merck (MRK) Dips More Than Broader Markets: What You Should Know

·3 min read

Merck (MRK) closed the most recent trading day at $72.80, moving -1.77% from the previous trading session. This change lagged the S&P 500's 0.08% loss on the day.

Heading into today, shares of the pharmaceutical company had lost 5.48% over the past month, lagging the Medical sector's gain of 0.58% and the S&P 500's gain of 1.68% in that time.

MRK will be looking to display strength as it nears its next earnings release. On that day, MRK is projected to report earnings of $1.66 per share, which would represent year-over-year growth of 21.17%. Our most recent consensus estimate is calling for quarterly revenue of $12.92 billion, up 18.86% from the year-ago period.

For the full year, our Zacks Consensus Estimates are projecting earnings of $6.47 per share and revenue of $51.78 billion, which would represent changes of +8.92% and +7.9%, respectively, from the prior year.

Investors should also note any recent changes to analyst estimates for MRK. These revisions help to show the ever-changing nature of 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, 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. The Zacks Consensus EPS estimate has moved 0.66% lower within the past month. MRK is holding a Zacks Rank of #4 (Sell) right now.

Digging into valuation, MRK currently has a Forward P/E ratio of 11.46. This represents a discount compared to its industry's average Forward P/E of 14.19.

Investors should also note that MRK has a PEG ratio of 1.87 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. MRK's industry had an average PEG ratio of 2.03 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 184, which puts it in the bottom 28% of all 250+ industries.

The Zacks Industry Rank includes is listed in order from best to worst in terms of the average Zacks Rank of the individual companies within each of these sectors. 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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