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

Zacks Equity Research

Merck (MRK) closed the most recent trading day at $82.51, moving +0.59% from the previous trading session. This change outpaced the S&P 500's 0.26% gain on the day. Meanwhile, the Dow gained 0.13%, and the Nasdaq, a tech-heavy index, added 0.4%.

Prior to today's trading, shares of the pharmaceutical company had lost 4.83% over the past month. This has lagged the Medical sector's gain of 0.32% and the S&P 500's gain of 3.92% in that time.

Wall Street will be looking for positivity from MRK as it approaches its next earnings report date. In that report, analysts expect MRK to post earnings of $1.26 per share. This would mark year-over-year growth of 5.88%. Meanwhile, the Zacks Consensus Estimate for revenue is projecting net sales of $11.73 billion, up 8.64% from the year-ago period.

MRK's full-year Zacks Consensus Estimates are calling for earnings of $4.89 per share and revenue of $46.09 billion. These results would represent year-over-year changes of +12.67% and +8.97%, respectively.

Investors should also note any recent changes to analyst estimates for MRK. These revisions typically reflect the latest short-term business trends, which can change frequently. As such, positive estimate revisions reflect analyst optimism about the company's business and profitability.

Our research shows that these estimate changes are directly correlated with near-term stock prices. 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 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 0.07% higher. MRK is currently sporting a Zacks Rank of #2 (Buy).

Looking at its valuation, MRK is holding a Forward P/E ratio of 16.77. Its industry sports an average Forward P/E of 13.73, so we one might conclude that MRK is trading at a premium comparatively.

We can also see that MRK currently has a PEG ratio of 1.67. 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 1.94 at yesterday's closing price.

The Large Cap Pharmaceuticals industry is part of the Medical sector. This group has a Zacks Industry Rank of 38, putting it in the top 15% 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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