Merck (MRK) Falls More Steeply Than Broader Market: What Investors Need to Know

Merck (MRK) closed the most recent trading day at $79.96, moving -1.91% from the previous trading session. The stock's change was less than the S&P 500's daily loss of 0.01%. At the same time, the Dow lost 0.32%, and the tech-heavy Nasdaq gained 0.05%.

Heading into today, shares of the pharmaceutical company had gained 2.81% over the past month, outpacing the Medical sector's loss of 1.59% and lagging the S&P 500's gain of 5.37%.

The upcoming earnings release of Merck will be of great interest to investors. The company's earnings report is expected on July 29, 2025. It is anticipated that the company will report an EPS of $2.01, marking a 11.84% fall compared to the same quarter of the previous year. Meanwhile, our latest consensus estimate is calling for revenue of $15.71 billion, down 2.48% from the prior-year quarter.

In terms of the entire fiscal year, the Zacks Consensus Estimates predict earnings of $8.85 per share and a revenue of $64.82 billion, indicating changes of +15.69% and +1.02%, respectively, from the former year.

Investors might also notice recent changes to analyst estimates for Merck. Recent revisions tend to reflect the latest near-term business trends. With this in mind, we can consider positive estimate revisions a sign of optimism about the business outlook.

Research indicates that these estimate revisions are directly correlated with near-term share price momentum. 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, running from #1 (Strong Buy) to #5 (Strong Sell), holds an admirable track record of superior performance, independently audited, with #1 stocks contributing an average annual return of +25% since 1988. Over the past month, the Zacks Consensus EPS estimate has shifted 0.84% downward. Merck is currently a Zacks Rank #4 (Sell).

From a valuation perspective, Merck is currently exchanging hands at a Forward P/E ratio of 9.21. This expresses a discount compared to the average Forward P/E of 14.13 of its industry.

Meanwhile, MRK's PEG ratio is currently 0.85. 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 1.26 as of yesterday's close.

The Large Cap Pharmaceuticals industry is part of the Medical sector. This group has a Zacks Industry Rank of 74, putting it in the top 30% of all 250+ industries.

The Zacks Industry Rank evaluates the power of our distinct industry groups by determining the average Zacks Rank of the individual stocks forming 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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Merck & Co., Inc. (MRK) : Free Stock Analysis Report

This article originally published on Zacks Investment Research (zacks.com).

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