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Mercer International (MERC) Gains But Lags Market: What You Should Know

Zacks Equity Research
·2-min read

Mercer International (MERC) closed at $14.26 in the latest trading session, marking a +1.35% move from the prior day. The stock lagged the S&P 500's daily gain of 1.53%. Elsewhere, the Dow gained 1.19%, while the tech-heavy Nasdaq added 0.14%.

Coming into today, shares of the pulp company had lost 13.47% in the past month. In that same time, the Basic Materials sector gained 0.07%, while the S&P 500 lost 3.1%.

Mercer International will be looking to display strength as it nears its next earnings release. The company is expected to report EPS of $1.05, up 0.96% from the prior-year quarter.

It is also important to note the recent changes to analyst estimates for Mercer International. Recent revisions tend to reflect the latest near-term business trends. As such, positive estimate revisions reflect analyst optimism about the company's business and profitability.

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Research indicates that these estimate revisions are directly correlated with near-term share price momentum. 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. The Zacks Consensus EPS estimate remained stagnant within the past month. Mercer International currently has a Zacks Rank of #1 (Strong Buy).

Digging into valuation, Mercer International currently has a Forward P/E ratio of 3.47. This represents a discount compared to its industry's average Forward P/E of 7.65.

The Paper and Related Products industry is part of the Basic Materials sector. This industry currently has a Zacks Industry Rank of 21, which puts it in the top 9% of all 250+ industries.

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

To follow MERC in the coming trading sessions, be sure to utilize Zacks.com.


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Zacks Investment Research