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

Zacks Equity Research
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Merck (MRK) closed the most recent trading day at $74.73, moving +0.17% from the previous trading session. This move outpaced the S&P 500's daily loss of 0.22%. At the same time, the Dow lost 0.22%, and the tech-heavy Nasdaq lost 0.23%.

Prior to today's trading, shares of the pharmaceutical company had lost 10.03% over the past month. This has lagged the Medical sector's loss of 5.31% and the S&P 500's gain of 4.87% in that time.

MRK will be looking to display strength as it nears its next earnings release, which is expected to be April 30, 2019. On that day, MRK is projected to report earnings of $1.05 per share, which would represent no growth from the prior-year quarter. Meanwhile, the Zacks Consensus Estimate for revenue is projecting net sales of $10.32 billion, up 2.8% from the year-ago period.

MRK's full-year Zacks Consensus Estimates are calling for earnings of $4.65 per share and revenue of $44.31 billion. These results would represent year-over-year changes of +7.14% and +4.78%, respectively.

It is also important to note the 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.

Based on our research, we believe these estimate revisions are directly related to near-team stock moves. 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. The Zacks Consensus EPS estimate has moved 0.11% higher within the past month. MRK is currently a Zacks Rank #2 (Buy).

Digging into valuation, MRK currently has a Forward P/E ratio of 16.03. This valuation marks a premium compared to its industry's average Forward P/E of 14.31.

Investors should also note that MRK has a PEG ratio of 1.81 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. The Large Cap Pharmaceuticals was holding an average PEG ratio of 2.16 at yesterday's closing price.

The Large Cap Pharmaceuticals industry is part of the Medical sector. This industry currently has a Zacks Industry Rank of 18, which puts it in the top 8% 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.

Be sure to follow all of these stock-moving metrics, and many more, on Zacks.com.


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