Health and Healthcare

What to Expect When Merck Reports Before the Opening Bell

Chris Lange

Published: February 4, 2020 1:05 pm

Merck & Co. Inc. (NYSE: MRK) is scheduled to release its fourth-quarter financial results before the markets open on Wednesday. The consensus estimates are calling for $1.15 in earnings per share (EPS) and $11.98 billion in revenue. That would be better than the $1.04 per share and $11.0 billion reported in the same period of last year.

For the most recent quarter, Merck said it achieved another period of strong revenue and earnings growth as it continues to realize the benefits of sustained investment in research and development. At the time, management said that it was confident that the investments the company was making would allow it to convert cutting-edge science into medicines and vaccines of great benefit to patients and value to shareholders.

During the third quarter, worldwide sales increased by 15%, or 16% excluding foreign exchange. This was largely driven by Keytruda sales increasing 62% year over year to $3.1 billion and Human Health Vaccines Sales increasing 17% to $2.5 billion.

The company also released full-year guidance at that time calling for EPS of $5.12 to $5.17 and revenue of $46.5 billion to $47.0 billion. The consensus estimates now are $5.17 in EPS and $46.98 billion in revenue for the 2019 full year.

Excluding Tuesday’s move, Merck stock had underperformed the broad markets with a gain of 14% in the past 52 weeks. However, the share price is up less than 1% in the past quarter.

Here’s what analysts had to say about Merck ahead of the report:

• UBS Group has a Buy rating with a $99 price target.
• Cantor Fitzgerald rates it a Buy with a $95 price target.
• Mizuho has a Buy rating with a $100 target price.
• Morgan Stanley rates it as Overweight with a $95 target.

Merck stock traded up 1.5% to $88.67 a share on Tuesday, in a 52-week range of $72.23 to $92.64. The consensus price target is $99.35.