Merck’s Anticipated Earnings Report: What to Expect
Merck & Co., Inc. (MRK), based in Rahway, New Jersey, boasts a market capitalization of $252.6 billion. The company stands out in the healthcare industry, operating via its Pharmaceutical and Animal Health segments. Merck is recognized for innovative products such as Keytruda and Gardasil, and it has a strong portfolio in oncology, immunology, and infectious diseases. The company also emphasizes growth through strategic partnerships and acquisitions. Investors and analysts are eagerly awaiting its fiscal Q4 earnings, set to be announced before market opening on Tuesday, Feb. 4.
Forecasts from analysts suggest that the pharmaceutical giant will report a profit of $1.76 per share, a remarkable jump from $0.03 per share reported in the same quarter last year. MRK has a track record of exceeding Wall Street’s earnings expectations, having done so for the past four quarters. Notably, it outperformed the consensus estimate by 4.7% in its most recent quarter.
For fiscal 2024, predictions indicate that MRK’s earnings per share (EPS) will reach $7.70, marking a substantial increase from $1.51 in fiscal 2023. Moving into fiscal 2025, the EPS is projected to grow by 22.6% year-over-year, hitting $9.44.
Over the past year, MRK’s shares have fallen 15.9%, which is significantly lower than the S&P 500 Index’s ($SPX) 24.4% gain and the slight decline of the Health Care Select Sector SPDR Fund’s (XLV) stock.
Despite exceeding expectations with a Q3 adjusted EPS of $1.57 and revenue of $16.7 billion, MRK’s stock fell by 2.4% on Oct. 31. This decline came after the company narrowed its full-year sales guidance to $63.6 billion – $64.1 billion. Investors reacted negatively to concerns regarding almost a 3% loss from foreign exchange fluctuations and higher one-time charges of $0.24 per share linked to business development. The company experienced lower-than-expected sales in key vaccine areas, particularly Gardasil, and saw a drop in revenue from Januvia/Janumet. Additionally, uncertainties about future profit margins and an adjusted EPS guidance of $7.72 – $7.77 also contributed to the caution among investors.
Nonetheless, overall analyst sentiment towards MRK remains positive, with a “Strong Buy” consensus rating. Among the 26 analysts covering MRK, 19 recommend “Strong Buys,” while seven suggest “Holds.” This marks a slight decrease from three months ago, when 24 analysts rated it as a “Strong Buy.” Currently, MRK’s stock trades below the average analyst price target of $130.17.
On the date of publication, Sohini Mondal did not hold (either directly or indirectly) positions in any of the securities mentioned in this article. All information and data provided are for informational purposes only. For more details, please view the Barchart Disclosure Policy here.
The views and opinions expressed herein are those of the author and do not necessarily reflect those of Nasdaq, Inc.
