Merck Stock Sinks as Market Gains: Here's Why – Merck & Co (NYSE:MRK)

merck MRK It closed the last trading day at $113.09, indicating a -1.43% change from the end of the previous session. This change lagged the S&P 500's 0.4% daily gain. Elsewhere, the Dow Jones gained 0.62%, while the tech-heavy Nasdaq added 0.6%.

Shares of the pharmaceutical company have seen a decline of 2.27% over the past month, aligning with the medical sector and lagging the S&P 500's gain of 1.71%.

Market participants will closely monitor Merck's financial results in its upcoming release. The company plans to announce its earnings on October 31, 2024. The company is expected to post EPS of $1.77, showing a downward movement of 16.9% from the corresponding quarter of the previous year. Meanwhile, the Zacks Consensus Estimate for revenue is projecting net sales of $16.48 billion, up 3.24% from the year-ago period.

For the full year, Zacks Consensus Estimates are projecting earnings of $8.01 per share and revenue of $64.14 billion, demonstrating changes of +430.46% and +6.69%, respectively, from to the previous year.

It is also important for investors to be aware of any recent changes to Merck analyst estimates. These recent changes often indicate the changing landscape of near-term business trends. With this in mind, we can consider positive estimate revisions a sign of optimism about the company's business prospects.

Empirical research indicates that these estimate revisions are directly correlated with impending stock price performance. Investors can take advantage of this by using the Zacks Rank. This model considers these estimated changes and provides a simple and 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 ranked stocks delivering an average annual return of +25% since 1988. Over the last 30 days, our consensus EPS projection remained stagnant. Merck currently has a Zacks Rank of 4 (Sell).

As for its valuation, Merck maintains a Forward P/E ratio of 14.33. This valuation marks a discount compared to its industry's average Forward P/E of 15.78.

Furthermore, we can see that MRK currently has a PEG ratio of 1.59. Comparable to the widely accepted P/E ratio, the PEG ratio also represents the company's projected earnings growth. At the close of trading yesterday, the large-cap Pharma industry had an average PEG ratio of 1.67.

The large-cap pharmaceutical industry is part of the medical sector. With its current Zacks Industry Rank of 44, this industry ranks in the top 18% of all industries with over 250.

The Zacks Industry Rank measures 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% of industries outperform the bottom half by a factor of 2 to 1.

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