Why Merck (MRK) is a Top Growth Stock for the Long-Term

Core Insights - The article emphasizes the importance of utilizing Zacks Premium for investors to enhance their stock market strategies and confidence in investing [1][2] Zacks Style Scores - Zacks Style Scores are indicators designed to help investors select stocks with the highest potential to outperform the market within a 30-day timeframe, rated from A to F based on value, growth, and momentum characteristics [3] - The Value Score identifies attractive stocks based on ratios like P/E, PEG, and Price/Sales, appealing to value investors seeking discounted stocks [4] - The Growth Score focuses on a company's financial health and future outlook, analyzing projected and historical earnings, sales, and cash flow to find sustainable growth stocks [5] - The Momentum Score assists momentum traders by evaluating trends in stock prices and earnings estimates, indicating optimal times to invest in high-momentum stocks [6] - The VGM Score combines all three Style Scores, providing a comprehensive rating that highlights stocks with the best value, growth potential, and momentum [7] Zacks Rank and Style Scores Integration - The Zacks Rank is a proprietary model that leverages earnings estimate revisions to guide investors in building successful portfolios, with 1 (Strong Buy) stocks yielding an average annual return of +23.93% since 1988, significantly outperforming the S&P 500 [8] - There are over 800 stocks rated as 1 or 2, making it essential for investors to utilize Style Scores to narrow down their choices [9] - To maximize returns, investors should target stocks with a Zacks Rank of 1 or 2 and Style Scores of A or B, while also considering stocks with a 3 rank if they possess strong Style Scores [10] Stock Analysis: Merck (MRK) - Merck & Co. has a strong portfolio, including the PD-L1 inhibitor Keytruda, which accounts for approximately 50% of its pharmaceutical sales, contributing to steady revenue growth [12] - Merck holds a 3 (Hold) rating on the Zacks Rank, with a VGM Score of A, and a Growth Style Score of B, indicating a forecasted year-over-year earnings growth of 17.4% for the current fiscal year [13] - Recent upward revisions by eight analysts for fiscal 2025 have increased the Zacks Consensus Estimate by $0.04 to $8.98 per share, with an average earnings surprise of +5.1% [13] - Given its solid Zacks Rank and favorable Growth and VGM Style Scores, Merck is recommended for investors' consideration [14]