Merck (MRK) Gains As Market Dips: What You Should Know
In the latest trading session, Merck (MRK) closed at $86.46, marking a +0.78% move from the previous day. The stock outpaced the S&P 500's daily loss of 0.06%. Meanwhile, the Dow gained 0.72%, and the Nasdaq, a tech-heavy index, added 0.47%.
Heading into today, shares of the pharmaceutical company had gained 8.18% over the past month, outpacing the Medical sector's loss of 0.06% and the S&P 500's gain of 0.17% in that time.
Merck will be looking to display strength as it nears its next earnings release, which is expected to be April 28, 2022. The company is expected to report EPS of $1.85, up 32.14% from the prior-year quarter. Our most recent consensus estimate is calling for quarterly revenue of $15 billion, up 24.15% from the year-ago period.
For the full year, our Zacks Consensus Estimates are projecting earnings of $7.19 per share and revenue of $57.25 billion, which would represent changes of +19.44% and +14.15%, respectively, from the prior year.
It is also important to note the recent changes to analyst estimates for Merck. These recent revisions tend to reflect the evolving nature of short-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 0.45% lower within the past month. Merck currently has a Zacks Rank of #3 (Hold).
In terms of valuation, Merck is currently trading at a Forward P/E ratio of 11.93. This valuation marks a discount compared to its industry's average Forward P/E of 13.71.
Meanwhile, MRK's PEG ratio is currently 1.39. 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 2.4 at yesterday's closing price.
The Large Cap Pharmaceuticals industry is part of the Medical sector. This group has a Zacks Industry Rank of 98, putting it in the top 39% 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.
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Merck & Co., Inc. (MRK) : Free Stock Analysis Report
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