In the latest trading session, Merck (MRK) closed at $75.37, marking a -0.01% move from the previous day. This change was narrower than the S&P 500's daily loss of 0.12%. Elsewhere, the Dow lost 0.33%, while the tech-heavy Nasdaq added 0.08%.
Heading into today, shares of the pharmaceutical company had lost 3.25% over the past month, outpacing the Medical sector's loss of 6.93% and the S&P 500's loss of 6.96% in that time.
MRK will be looking to display strength as it nears its next earnings release, which is expected to be February 1, 2019. The company is expected to report EPS of $1.04, up 6.12% from the prior-year quarter. Meanwhile, the Zacks Consensus Estimate for revenue is projecting net sales of $11.05 billion, up 5.91% from the year-ago period.
For the full year, our Zacks Consensus Estimates are projecting earnings of $4.34 per share and revenue of $42.29 billion, which would represent changes of +9.05% and +5.41%, respectively, from the prior year.
Any recent changes to analyst estimates for MRK should also be noted by investors. These recent revisions tend to reflect the evolving nature of short-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. 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 ranges from #1 (Strong Buy) to #5 (Strong Sell). It has a remarkable, outside-audited track record of success, with #1 stocks delivering an average annual return of +25% since 1988. Over the past month, the Zacks Consensus EPS estimate remained stagnant. MRK is currently sporting a Zacks Rank of #2 (Buy).
Digging into valuation, MRK currently has a Forward P/E ratio of 17.39. This represents a premium compared to its industry's average Forward P/E of 14.03.
Also, we should mention that MRK has a PEG ratio of 2.05. 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. Large Cap Pharmaceuticals stocks are, on average, holding a PEG ratio of 1.85 based on yesterday's closing prices.
The Large Cap Pharmaceuticals industry is part of the Medical sector. This group has a Zacks Industry Rank of 94, putting it in the top 37% 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.
The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.