In the latest trading session, Merck (MRK) closed at $85.23, marking a -0.33% move from the previous day. This move was narrower than the S&P 500's daily loss of 0.95%. Elsewhere, the Dow lost 0.67%, while the tech-heavy Nasdaq lost 1.51%.
Coming into today, shares of the pharmaceutical company had gained 5.35% in the past month. In that same time, the Medical sector gained 3.89%, while the S&P 500 gained 4.32%.
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 $1.15 per share. This would mark year-over-year growth of 8.49%. Our most recent consensus estimate is calling for quarterly revenue of $10.91 billion, up 4.21% from the year-ago period.
Looking at the full year, our Zacks Consensus Estimates suggest analysts are expecting earnings of $4.74 per share and revenue of $44.56 billion. These totals would mark changes of +9.22% and +5.36%, respectively, from last year.
It is also important to note the 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.
Research indicates that these estimate revisions are directly correlated with near-term share price momentum. We developed the Zacks Rank to capitalize on this phenomenon. Our system takes these estimate changes into account and delivers a clear, actionable rating model.
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 0.39% higher within the past month. MRK is currently sporting a Zacks Rank of #2 (Buy).
Looking at its valuation, MRK is holding a Forward P/E ratio of 18.06. This represents a premium compared to its industry's average Forward P/E of 14.83.
It is also worth noting that MRK currently has a PEG ratio of 1.83. 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 2.12 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 76, which puts it in the top 30% 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.
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