/Merck%20%26%20Co%20Inc%20HQ%20-by%20Sundry%20Photography%20via%20iStock.jpg)
With a market cap of $252.6 billion, Rahway, New Jersey-based Merck & Co., Inc. (MRK) is a global leader in the healthcare industry, operating through its Pharmaceutical and Animal Health segments. The company is known for its innovative products, including Keytruda, Gardasil, and a variety of treatments in oncology, immunology, and infectious diseases, as well as its commitment to advancing healthcare solutions through strategic partnerships and acquisitions. It is expected to unveil its fiscal Q4 earnings results before the market opens on Tuesday, Feb. 4.
Before the event, analysts anticipated the pharmaceutical company to report a profit of $1.76 per share, a substantial increase from $0.03 per share in the same quarter last year. The company has consistently surpassed Wall Street's earnings projections in the past four quarters. MRK exceeded the consensus estimate by 4.7% in the last reported quarter.
For fiscal 2024, analysts expect MRK to report EPS of $7.70, up significantly from $1.51 in fiscal 2023. Looking forward to fiscal 2025, EPS is expected to grow 22.6% year-over-year, reaching $9.44.
MRK's shares have dipped 15.9% over the past 52 weeks, underperforming the S&P 500 Index's ($SPX) 24.4% gain and the Health Care Select Sector SPDR Fund's (XLV) marginal drop over the same period.
Despite reporting better-than-expected Q3 adjusted EPS of $1.57 and revenue of $16.7 billion, shares of MRK fell 2.4% on Oct. 31 due to a narrowing of its full-year sales guidance to $63.6 billion - $64.1 billion. Concerns over a negative impact of nearly 3% from foreign exchange rates and increased one-time charges of $0.24 per share related to business development weighed on investor sentiment. Additionally, lower-than-anticipated sales in key vaccine segments, particularly Gardasil, and declining revenues in Januvia/Janumet contributed to the decline. The uncertainty surrounding future margins, adjusted EPS guidance of $7.72 - $7.77, and increased operating expenses also affected investor reaction.
However, analysts' consensus rating on MRK stock is bullish, with a "Strong Buy" overall rating. Out of 26 analysts covering the stock, opinions include 19 "Strong Buys" and seven "Holds." This configuration is less bullish than three months ago, with 24 analysts suggesting a "Strong Buy." Currently, MRK is trading below the average analyst price target of $130.17.
