Merck (MRK) Gains As Market Dips: What You Should Know
Merck (MRK) closed the most recent trading day at $77.35, moving +0.81% from the previous trading session. The stock outpaced the S&P 500's daily loss of 0.94%. Meanwhile, the Dow gained 0.04%, and the Nasdaq, a tech-heavy index, lost 2.13%.
Heading into today, shares of the pharmaceutical company had lost 0.8% over the past month, outpacing the Medical sector's loss of 1.77% and lagging the S&P 500's gain of 0.02% 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 July 31, 2020. The company is expected to report EPS of $1.12, down 13.85% from the prior-year quarter. Meanwhile, our latest consensus estimate is calling for revenue of $10.84 billion, down 7.85% from the prior-year quarter.
For the full year, our Zacks Consensus Estimates are projecting earnings of $5.30 per share and revenue of $47.36 billion, which would represent changes of +2.12% and +1.12%, respectively, from the prior year.
Any recent changes to analyst estimates for MRK should also be noted by investors. Recent revisions tend to reflect the latest near-term business trends. 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. 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. Within the past 30 days, our consensus EPS projection has moved 0.19% lower. MRK is holding a Zacks Rank of #3 (Hold) right now.
Looking at its valuation, MRK is holding a Forward P/E ratio of 14.47. For comparison, its industry has an average Forward P/E of 15.3, which means MRK is trading at a discount to the group.
It is also worth noting that MRK currently has a PEG ratio of 2.15. 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 industry currently had an average PEG ratio of 2.12 as of yesterday's close.
The Large Cap Pharmaceuticals industry is part of the Medical sector. This industry currently has a Zacks Industry Rank of 22, which puts it in the top 9% 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.
Make sure to utilize Zacks. Com to follow all of these stock-moving metrics, and more, in the coming trading sessions.
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The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.