U.S. Markets closed

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

Zacks Equity Research
Broadcom Inc. (AVGO) closed at $275.28 in the latest trading session, marking a +0.99% move from the prior day.

Merck (MRK) closed the most recent trading day at $80.95, moving -0.25% from the previous trading session. This move lagged the S&P 500's daily gain of 0.11%. Elsewhere, the Dow lost 0.32%, while the tech-heavy Nasdaq added 0.19%.

Heading into today, shares of the pharmaceutical company had gained 0.87% over the past month, lagging the Medical sector's gain of 1.2% and the S&P 500's gain of 3.84% 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 30, 2019. On that day, MRK is projected to report earnings of $1.05 per share, which would represent no growth from the year-ago period. Meanwhile, our latest consensus estimate is calling for revenue of $10.36 billion, up 3.25% from the prior-year quarter.

For the full year, our Zacks Consensus Estimates are projecting earnings of $4.65 per share and revenue of $44.33 billion, which would represent changes of +7.14% and +4.8%, respectively, from the prior year.

It is also important to note the recent changes to analyst estimates for MRK. 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.

Research indicates that these estimate revisions are directly correlated with near-term share price momentum. 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, 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. Within the past 30 days, our consensus EPS projection has moved 0.26% higher. MRK is currently a Zacks Rank #2 (Buy).

Digging into valuation, MRK currently has a Forward P/E ratio of 17.45. This represents a premium compared to its industry's average Forward P/E of 15.44.

It is also worth noting that MRK currently has a PEG ratio of 1.98. 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 2.12 at yesterday's closing price.

The Large Cap Pharmaceuticals industry is part of the Medical sector. This group has a Zacks Industry Rank of 109, putting it in the top 43% 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.

You can find more information on all of these metrics, and much more, on Zacks.com.


Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report
 
Merck & Co., Inc. (MRK) : Free Stock Analysis Report
 
To read this article on Zacks.com click here.