Merck (MRK) Gains But Lags Market: What You Should Know
Merck (MRK) closed the most recent trading day at $82.46, moving +1.03% from the previous trading session. This change lagged the S&P 500's 1.45% gain on the day. At the same time, the Dow added 1.22%, and the tech-heavy Nasdaq gained 0.78%.
Prior to today's trading, shares of the pharmaceutical company had gained 2.99% over the past month. This has outpaced the Medical sector's loss of 6.04% and the S&P 500's loss of 7.42% 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 28, 2020. On that day, MRK is projected to report earnings of $1.41 per share, which would represent year-over-year growth of 15.57%. Our most recent consensus estimate is calling for quarterly revenue of $11.96 billion, up 10.61% from the year-ago period.
MRK's full-year Zacks Consensus Estimates are calling for earnings of $5.70 per share and revenue of $49.44 billion. These results would represent year-over-year changes of +9.83% and +5.54%, respectively.
Any recent changes to analyst estimates for MRK should also be noted by investors. These revisions help to show the ever-changing nature of near-term business trends. 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. 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.
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. Over the past month, the Zacks Consensus EPS estimate has moved 0.35% lower. MRK is currently a Zacks Rank #3 (Hold).
In terms of valuation, MRK is currently trading at a Forward P/E ratio of 14.32. This represents a premium compared to its industry's average Forward P/E of 14.25.
Also, we should mention that MRK has a PEG ratio of 2.09. 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 1.83 at yesterday's closing price.
The Large Cap Pharmaceuticals industry is part of the Medical sector. This group has a Zacks Industry Rank of 14, putting it in the top 6% 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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