Merck (MRK) Gains As Market Dips: What You Should Know
In the latest trading session, Merck (MRK) closed at $77.89, marking a +0.13% move from the previous day. This change outpaced the S&P 500's 0.43% loss on the day. At the same time, the Dow lost 0.34%, and the tech-heavy Nasdaq lost 0.62%.
Heading into today, shares of the pharmaceutical company had gained 1.65% over the past month, outpacing the Medical sector's loss of 3.51% and the S&P 500's loss of 6.57% in that time.
Wall Street will be looking for positivity from Merck as it approaches its next earnings report date. This is expected to be April 28, 2022. On that day, Merck is projected to report earnings of $1.87 per share, which would represent year-over-year growth of 33.57%. Meanwhile, our latest consensus estimate is calling for revenue of $14.73 billion, up 21.91% from the prior-year quarter.
For the full year, our Zacks Consensus Estimates are projecting earnings of $7.23 per share and revenue of $57.09 billion, which would represent changes of +20.1% and +13.83%, respectively, from the prior year.
It is also important to note the recent changes to analyst estimates for Merck. These revisions typically reflect the latest short-term business trends, which can change frequently. 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 0.05% lower. Merck is holding a Zacks Rank of #3 (Hold) right now.
Looking at its valuation, Merck is holding a Forward P/E ratio of 10.77. For comparison, its industry has an average Forward P/E of 12.5, which means Merck is trading at a discount to the group.
We can also see that MRK currently has a PEG ratio of 1.25. 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 industry currently had an average PEG ratio of 2.07 as of yesterday's close.
The Large Cap Pharmaceuticals industry is part of the Medical sector. This group has a Zacks Industry Rank of 105, putting it in the top 42% of all 250+ industries.
The Zacks Industry Rank gauges the strength of our 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.
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