Merck (MRK) Outpaces Stock Market Gains: What You Should Know
Merck (MRK) closed at $77.30 in the latest trading session, marking a +0.64% move from the prior day. This change outpaced the S&P 500's 0.29% gain on the day. Meanwhile, the Dow gained 0.58%, and the Nasdaq, a tech-heavy index, added 0.4%.
Prior to today's trading, shares of the pharmaceutical company had gained 1.64% over the past month. This has outpaced the Medical sector's loss of 3.48% and the S&P 500's gain of 0.91% in that time.
Wall Street will be looking for positivity from MRK as it approaches its next earnings report date. This is expected to be April 29, 2021. On that day, MRK is projected to report earnings of $1.65 per share, which would represent year-over-year growth of 10%. Meanwhile, the Zacks Consensus Estimate for revenue is projecting net sales of $12.85 billion, up 6.58% from the year-ago period.
Looking at the full year, our Zacks Consensus Estimates suggest analysts are expecting earnings of $6.56 per share and revenue of $52.07 billion. These totals would mark changes of +10.44% and +8.5%, respectively, from last year.
Investors might also notice recent changes to analyst estimates for MRK. 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, 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 0.13% higher within the past month. MRK is currently a Zacks Rank #3 (Hold).
Investors should also note MRK's current valuation metrics, including its Forward P/E ratio of 11.62. Its industry sports an average Forward P/E of 13.15, so we one might conclude that MRK is trading at a discount comparatively.
Meanwhile, MRK's PEG ratio is currently 1.92. 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 1.91 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 221, which puts it in the bottom 14% 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.
Be sure to follow all of these stock-moving metrics, and many more, on Zacks.com.
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