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

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In the latest market close, Merck (MRK - Free Report) reached $88.11, with a +0.27% movement compared to the previous day. The stock exceeded the S&P 500, which registered a loss of 1.12% for the day. Meanwhile, the Dow lost 0.31%, and the Nasdaq, a tech-heavy index, lost 2.04%.

The pharmaceutical company's stock has dropped by 3.89% in the past month, falling short of the Medical sector's loss of 2.99% and the S&P 500's loss of 2.91%.

The upcoming earnings release of Merck will be of great interest to investors. The company's earnings report is expected on April 24, 2025. The company is predicted to post an EPS of $2.16, indicating a 4.35% growth compared to the equivalent quarter last year. In the meantime, our current consensus estimate forecasts the revenue to be $15.75 billion, indicating a 0.16% decline compared to the corresponding quarter of the prior year.

Looking at the full year, the Zacks Consensus Estimates suggest analysts are expecting earnings of $9.01 per share and revenue of $65.19 billion. These totals would mark changes of +17.78% and +1.6%, respectively, from last year.

Investors should also take note of any recent adjustments to analyst estimates for Merck. These latest adjustments often mirror the shifting dynamics of short-term business patterns. With this in mind, we can consider positive estimate revisions a sign of optimism about the company's business outlook.

Empirical research indicates that these revisions in estimates have a direct correlation with impending stock price performance. 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, which ranges from #1 (Strong Buy) to #5 (Strong Sell), has an impressive outside-audited track record of outperformance, with #1 stocks generating an average annual return of +25% since 1988. Over the past month, the Zacks Consensus EPS estimate has shifted 0.06% downward. Currently, Merck is carrying a Zacks Rank of #3 (Hold).

Looking at its valuation, Merck is holding a Forward P/E ratio of 9.75. Its industry sports an average Forward P/E of 14.23, so one might conclude that Merck is trading at a discount comparatively.

It's also important to note that MRK currently trades at a PEG ratio of 0.77. The PEG ratio bears resemblance to the frequently used P/E ratio, but this parameter also includes the company's expected earnings growth trajectory. The average PEG ratio for the Large Cap Pharmaceuticals industry stood at 1.37 at the close of the market yesterday.

The Large Cap Pharmaceuticals industry is part of the Medical sector. At present, this industry carries a Zacks Industry Rank of 48, placing it within the top 20% of over 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.

You can find more information on all of these metrics, and much more, on Zacks.com.


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