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

Zacks Equity Research
Sunworks, Inc. (SUNW) closed at $0.70 in the latest trading session, marking a -1.8% move from the prior day.

In the latest trading session, Merck (MRK) closed at $82.35, marking a +0.07% move from the previous day. The stock outpaced the S&P 500's daily loss of 0.08%. Elsewhere, the Dow gained 0.06%, while the tech-heavy Nasdaq lost 0.07%.

Heading into today, shares of the pharmaceutical company had gained 3.08% over the past month, outpacing the Medical sector's loss of 0.22% and the S&P 500's gain of 0.52% in that time.

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 $1.06 per share. This would mark year-over-year growth of 0.95%. Our most recent consensus estimate is calling for quarterly revenue of $10.50 billion, up 4.57% from the year-ago period.

For the full year, our Zacks Consensus Estimates are projecting earnings of $4.65 per share and revenue of $44.38 billion, which would represent changes of +7.14% and +4.93%, respectively, from the prior year.

Investors might also notice 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. Investors can capitalize on this by using the Zacks Rank. This model considers these estimate changes and provides a simple, 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 0.14% lower within the past month. MRK is currently a Zacks Rank #3 (Hold).

Digging into valuation, MRK currently has a Forward P/E ratio of 17.7. This represents a premium compared to its industry's average Forward P/E of 15.3.

Meanwhile, MRK's PEG ratio is currently 2.01. 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 2.13 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 158, which puts it in the bottom 39% 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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