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Merck (MRK) Gains But Lags Market: What You Should Know

Merck (MRK) closed at $87.55 in the latest trading session, marking a +1.66% move from the prior day. This change lagged the S&P 500's 2.59% gain on the day. At the same time, the Dow added 2.66%, and the tech-heavy Nasdaq gained 0.07%.

Coming into today, shares of the pharmaceutical company had lost 0.13% in the past month. In that same time, the Medical sector lost 3.87%, while the S&P 500 lost 9.22%.

Investors will be hoping for strength from Merck as it approaches its next earnings release, which is expected to be October 27, 2022. In that report, analysts expect Merck to post earnings of $1.71 per share. This would mark a year-over-year decline of 2.29%. Meanwhile, the Zacks Consensus Estimate for revenue is projecting net sales of $14.4 billion, up 9.47% from the year-ago period.

MRK's full-year Zacks Consensus Estimates are calling for earnings of $7.33 per share and revenue of $59.04 billion. These results would represent year-over-year changes of +21.76% and +17.72%, respectively.

Investors should also note any recent changes to analyst estimates for Merck. 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. Investors can capitalize on this by using the Zacks Rank. This model considers these estimate changes and provides a simple, actionable rating system.

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 0.24% higher. Merck is currently sporting a Zacks Rank of #3 (Hold).

Valuation is also important, so investors should note that Merck has a Forward P/E ratio of 11.74 right now. This valuation marks a discount compared to its industry's average Forward P/E of 12.13.

Investors should also note that MRK has a PEG ratio of 1.16 right now. 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. Large Cap Pharmaceuticals stocks are, on average, holding a PEG ratio of 1.78 based on yesterday's closing prices.

The Large Cap Pharmaceuticals industry is part of the Medical sector. This industry currently has a Zacks Industry Rank of 86, which puts it in the top 35% 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.

To follow MRK in the coming trading sessions, be sure to utilize Zacks.com.


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