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

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Merck (MRK - Free Report) closed the most recent trading day at $77.99, moving +0.28% from the previous trading session. This move lagged the S&P 500's daily gain of 0.52%.

Heading into today, shares of the pharmaceutical company had gained 2.5% over the past month, lagging the Medical sector's gain of 3.18% and outpacing the S&P 500's gain of 2.25% in that time.

Investors will be hoping for strength from MRK as it approaches its next earnings release, which is expected to be July 29, 2021. On that day, MRK is projected to report earnings of $1.60 per share, which would represent year-over-year growth of 16.79%. Our most recent consensus estimate is calling for quarterly revenue of $12.28 billion, up 12.92% from the year-ago period.

MRK's full-year Zacks Consensus Estimates are calling for earnings of $6.47 per share and revenue of $47.92 billion. These results would represent year-over-year changes of +8.92% and -0.15%, respectively.

Any recent changes to analyst estimates for MRK should also be noted by investors. 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.

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

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. Within the past 30 days, our consensus EPS projection remained stagnant. MRK is currently sporting a Zacks Rank of #4 (Sell).

Digging into valuation, MRK currently has a Forward P/E ratio of 12.02. For comparison, its industry has an average Forward P/E of 14.61, which means MRK is trading at a discount to the group.

It is also worth noting that MRK currently has a PEG ratio of 1.96. 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. MRK's industry had an average PEG ratio of 2.1 as of yesterday's close.

The Large Cap Pharmaceuticals industry is part of the Medical sector. This group has a Zacks Industry Rank of 188, putting it in the bottom 26% of all 250+ industries.

The Zacks Industry Rank includes is listed in order from best to worst in terms of the average Zacks Rank of the individual companies within each of these sectors. 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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