Health and Healthcare

What to Expect When Merck Reports on Friday

Chris Lange

Published: January 31, 2019 11:15 am

Last Updated: January 31, 2020 1:11 am

Merck & Co Inc. (NYSE: MRK) is scheduled to release its fourth-quarter report before the markets open on Friday. This was the best performing Dow Jones industrial stock of 2018 with a 35.8% gain. That is after having disappointed in 2017 with a return of −4.4%. Merck is viewed as defensive in a choppy market, but there sure has been a lot of talk by politicians about drug-price controls.

Thomson Reuters consensus estimates are calling for $1.03 in earnings per share (EPS) and $10.94 billion in revenue. In the same period of last year, Merck said it had EPS of $0.98 on $10.43 billion in revenue.

Earlier this month, Merck announced that its blockbuster drug Keytruda received five new approvals from Japan’s Pharmaceuticals and Medical Devices Agency, including three expanded uses in advanced non-small lung cancer, one in melanoma, and a new indication in advanced microsatellite instability-high tumors.

Dr. Roy Baynes, senior vice president, head of global clinical development and chief medical officer, Merck Research Laboratories, commented:

These five simultaneous approvals of Keytruda in Japan represent a significant achievement that involved extensive collaboration with the Japan Pharmaceuticals and Medical Devices Agency. We appreciate the Agency’s efforts to expedite availability of this important medicine to more patients living with cancer in Japan.

Excluding Thursday’s move, Merck had underperformed the broad markets, with its stock down 4% year to date. In the past 52 weeks, the stock was up 19%.

A few analysts weighed in on Merck ahead of the report:

• BMO Capital Markets rates it as Market Perform with an $80 price target.
• Citigroup has a Hold rating with a $65 price target.
• Morgan Stanley has a Buy rating and an $81 price target.
• Credit Suisse has a Buy rating with an $86 price target.

Shares of Merck were last seen up about 1% at $74.06 on Thursday, with a 52-week range of $52.83 to $80.19. The stock has a consensus analyst price target of $82.09.