Yahoo Finance Merck & Co., Inc. (NYSE:MRK) Just Released Its First-Quarter Earnings: Here's What Analysts Think
Merck & Co., Inc. (NYSE:MRK) just released its quarterly report and things are looking bullish. The company beat expectations with revenues of US$16b arriving 3.8% ahead of forecasts. Statutory earnings per share (EPS) were US$1.87, 4.4% ahead of estimates. Following the result, the analysts have updated their earnings model, and it would be good to know whether they think there's been a strong change in the company's prospects, or if it's business as usual. So we gathered the latest post-earnings forecasts to see what estimates suggest is in store for next year.
View our latest analysis for Merck
Taking into account the latest results, the consensus forecast from Merck's 25 analysts is for revenues of US$64.0b in 2024. This reflects an okay 4.3% improvement in revenue compared to the last 12 months. Statutory earnings per share are predicted to jump 751% to US$7.75. Yet prior to the latest earnings, the analysts had been anticipated revenues of US$63.8b and earnings per share (EPS) of US$7.77 in 2024. The consensus analysts don't seem to have seen anything in these results that would have changed their view on the business, given there's been no major change to their estimates.
The analysts reconfirmed their price target of US$140, showing that the business is executing well and in line with expectations. It could also be instructive to look at the range of analyst estimates, to evaluate how different the outlier opinions are from the mean. Currently, the most bullish analyst values Merck at US$155 per share, while the most bearish prices it at US$114. This is a very narrow spread of estimates, implying either that Merck is an easy company to value, or - more likely - the analysts are relying heavily on some key assumptions.
These estimates are interesting, but it can be useful to paint some more broad strokes when seeing how forecasts compare, both to the Merck's past performance and to peers in the same industry. We would highlight that Merck's revenue growth is expected to slow, with the forecast 5.7% annualised growth rate until the end of 2024 being well below the historical 8.8% p.a. growth over the last five years. By way of comparison, the other companies in this industry with analyst coverage are forecast to grow their revenue at 9.2% per year. Factoring in the forecast slowdown in growth, it seems obvious that Merck is also expected to grow slower than other industry participants.
The Bottom Line
The most obvious conclusion is that there's been no major change in the business' prospects in recent times, with the analysts holding their earnings forecasts steady, in line with previous estimates. Fortunately, the analysts also reconfirmed their revenue estimates, suggesting that it's tracking in line with expectations. Although our data does suggest that Merck's revenue is expected to perform worse than the wider industry. There was no real change to the consensus price target, suggesting that the intrinsic value of the business has not undergone any major changes with the latest estimates.
Keeping that in mind, we still think that the longer term trajectory of the business is much more important for investors to consider. At Simply Wall St, we have a full range of analyst estimates for Merck going out to 2026, and you can see them free on our platform here..
We don't want to rain on the parade too much, but we did also find 5 warning signs for Merck that you need to be mindful of.
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This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned.
