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

In the latest trading session, Merck (MRK) closed at $78.57, marking a +1.17% move from the previous day. The stock outpaced the S&P 500's daily loss of 0.68%.

Prior to today's trading, shares of the pharmaceutical company had lost 0.05% over the past month. This has was narrower than the Medical sector's loss of 1.49% and lagged the S&P 500's gain of 6.62% in that time.

Investors will be hoping for strength from MRK as it approaches its next earnings release, which is expected to be April 29, 2021. In that report, analysts expect MRK to post earnings of $1.62 per share. This would mark year-over-year growth of 8%. Meanwhile, the Zacks Consensus Estimate for revenue is projecting net sales of $12.85 billion, up 6.54% 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 $52.09 billion. These totals would mark changes of +10.44% and +8.54%, respectively, from last year.

Investors might also notice 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.

Based on our research, we believe these estimate revisions are directly related to near-team stock moves. 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.

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. Within the past 30 days, our consensus EPS projection has moved 0.04% higher. MRK is currently sporting a Zacks Rank of #3 (Hold).

In terms of valuation, MRK is currently trading at a Forward P/E ratio of 11.81. Its industry sports an average Forward P/E of 13.8, so we one might conclude that MRK is trading at a discount comparatively.

It is also worth noting that MRK currently has a PEG ratio of 1.95. 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. MRK's industry had an average PEG ratio of 1.92 as of yesterday's close.

The Large Cap Pharmaceuticals industry is part of the Medical sector. This group has a Zacks Industry Rank of 231, putting it in the bottom 10% 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.


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