Pfizer Inc. (NYSE: PFE) and Merck & Co. Inc. (NYSE: MRK) released their most recent earnings reports last week. As a result, analysts weighed in on both of these pharmaceutical giants. 24/7 Wall St. included some of the highlights from the earnings reports, as well as brief analyst montages.
Pfizer reported quarterly adjusted diluted earnings per share (EPS) of $0.53 and revenues of $14.05 billion. In the same period a year ago, Pfizer reported EPS of $0.54 on revenues of $13.12 billion. Fourth-quarter results also compare to the Thomson Reuters consensus estimates for EPS of $0.52 and $13.56 billion in revenues.
Quarterly revenues were up 7% year over year on strong operational growth, partially offset by a 7% negative impact from foreign exchange rates. Excluding the effects of its Hospira acquisition, foreign exchange rates and revenues from vaccine acquisitions, fourth-quarter revenues rose 5%.
The company guided 2016 revenues in a range of $49 billion to $51 billion and adjusted EPS in a range of $2.20 to $2.30. At constant currency rates, revenues are forecast in a range of $51.3 billion to $53.3 billion and adjusted EPS is expected to fall in a range of $2.36 to $2.46. Foreign exchange rates are expected to cost the company $0.09 per share in 2016, and Venezuelan foreign exchange rates are expected to cost Pfizer another $0.07. The proposed merger with Allergan has no impact on the company’s outlook.
Analysts had been looking for 2016 EPS of $2.36 and revenues of $52.49 billion, and Pfizer’s forecast, including currency effects, is lower than expected.
A few analysts weighed in on Pfizer after the earnings report:
- Credit Suisse lowered its price target to $38 from $41.
- Deutsche Bank has a Buy rating and lowered its price target from $43 to $41.
- Bernstein has an Outperform rating but lowered its price target to $36 from $41.
- BMO Capital Markets reiterated an Outperform rating and lowered its price target to $39 from $41.
Shares of Pfizer closed Friday at $29.03, with a consensus analyst price target of $39.63 and a 52-week trading range of $28.47 to $36.46.
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Merck had $0.93 in EPS on $10.21 billion in revenue, which compares to consensus estimates of $0.91 in EPS on revenue of $10.35 billion. In the same period of the previous year, the pharmaceutical giant posted EPS of $0.87 and $10.48 billion in revenue.
In the fourth quarter, revenues decreased by 3% compared with last year, including a 7% negative impact from foreign exchange and a 3% net positive impact primarily from the acquisition of Cubist Pharmaceuticals.
Also in the fourth quarter, Merck significantly advanced its development program for Keytruda (pembrolizumab), an anti-PD-1 therapy for the treatment of metastatic non-small cell lung cancer in previously treated patients whose tumors express PD-L1, as well as advanced melanoma.
In terms of the outlook for 2016, Merck expects EPS to be in the range of $3.60 to $3.75 and revenues between $38.7 billion and $40.2 billion. The consensus estimates call for $3.72 in EPS on $40.25 in revenue for the full year.
A few analysts weighed in on Merck following the release of its earnings report:
- S&P Equity Research reiterated a Hold rating with a $56 price target.
- Credit Suisse lowered its price target to $56 from $59.
- Goldman Sachs has a Neutral rating but lowered its price target from $60 to $56.
- BMO Capital Markets has an Outperform rating and lowered its price target to $58 from $60.
Shares of Merck closed Friday at $49.38, with a consensus price target of $60.11 and a 52-week range of $45.69 to $61.70.
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