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Should You Buy Merck & Co., Inc. (MRK) Stock Wednesday?

Wednesday, October 05, 2022 02:41 PM | InvestorsObserver Analysts
Should You Buy Merck & Co., Inc. (MRK) Stock Wednesday?

InvestorsObserver gives Merck & Co., Inc. (MRK) a strong valuation score of 89 from its analysis. The proprietary scoring system considers the underlying health of a company by analyzing its stock price, earnings, and growth rate. MRK currently holds a better value than 89% of stocks based on these metrics. Long term investors focused on buying-and-holding should find the valuation ranking system most relevant when making investment decisions.

Valuation Rank - 89
MRK gets a 89 Valuation Rank today. Find out what this means to you and get the rest of the rankings on MRK!

Metrics Analysis

MRK has a trailing twelve month Price to Earnings (PE) ratio of 13.5 which places it around the histroical average of roughly 15. MRK is currently trading at a average value due to investors paying around what the stock is worth in relation to its earnings. MRK's trailing-12-month earnings per share (EPS) of 6.53 does justify its share price in the market. Trailing PE ratios do not factor in the company's projected growth rate, thus, some firms will have high PE ratios caused by high growth recruiting more investors even if the underlying company has produced low earnings so far.
MRK's 12-month-forward PE to Growth (PEG) ratio of 1.16 is considered a roughly average value as the market is valuing MRK right in line with its projected earnings growth. MRK's PEG comes from its forward price to earnings ratio being divided by its growth rate. A PEG ratio of 1 represents a perfect correlation between earnings growth and share price. Due to their incorporation of more fundamentals of a company's overall health and focusing on the future rather than the past, PEG ratios are one of the most used valuation metrics by analysts today.

Summary

MRK' has a adequate valuation at its current share price on account of a fairly valued PEG ratio despite strong growth. MRK's PE and PEG are around the market average leading to a average valuation score. Click Here to get the full Report on Merck & Co., Inc. (MRK) stock.

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