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Merck (MRK) Outpaces Stock Market Gains: What You Should Know

·3 min read

Merck (MRK) closed at $86.95 in the latest trading session, marking a +0.78% move from the prior day. This move outpaced the S&P 500's daily gain of 0.34%. Elsewhere, the Dow gained 0.1%, while the tech-heavy Nasdaq lost 0.05%.

Coming into today, shares of the pharmaceutical company had lost 4.76% in the past month. In that same time, the Medical sector lost 5.59%, while the S&P 500 lost 7.95%.

Merck will be looking to display strength as it nears its next earnings release, which is expected to be October 27, 2022. In that report, analysts expect Merck to post earnings of $1.74 per share. This would mark a year-over-year decline of 0.57%. Meanwhile, our latest consensus estimate is calling for revenue of $14.4 billion, up 9.46% from the prior-year quarter.

Looking at the full year, our Zacks Consensus Estimates suggest analysts are expecting earnings of $7.33 per share and revenue of $59.04 billion. These totals would mark changes of +21.76% and +17.72%, respectively, from last year.

Investors might also notice recent changes to analyst estimates for Merck. Recent revisions tend to reflect the latest near-term business trends. With this in mind, we can consider positive estimate revisions a sign of optimism about 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.

Ranging from #1 (Strong Buy) to #5 (Strong Sell), the Zacks Rank system has a proven, outside-audited track record of outperformance, with #1 stocks returning an average of +25% annually since 1988. Within the past 30 days, our consensus EPS projection has moved 0.24% higher. Merck currently has a Zacks Rank of #3 (Hold).

Looking at its valuation, Merck is holding a Forward P/E ratio of 11.77. This valuation marks a discount compared to its industry's average Forward P/E of 12.65.

Also, we should mention that MRK has a PEG ratio of 1.16. 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 1.89 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 94, which puts it in the top 38% 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.

Make sure to utilize Zacks.com to follow all of these stock-moving metrics, and more, in the coming trading sessions.


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