We use cookies to understand how you use our site and to improve your experience. This includes personalizing content and advertising. To learn more, click here. By continuing to use our site, you accept our use of cookies, revised Privacy Policy and Terms of Service.
You are being directed to ZacksTrade, a division of LBMZ Securities and licensed broker-dealer. ZacksTrade and Zacks.com are separate companies. The web link between the two companies is not a solicitation or offer to invest in a particular security or type of security. ZacksTrade does not endorse or adopt any particular investment strategy, any analyst opinion/rating/report or any approach to evaluating individual securities.
If you wish to go to ZacksTrade, click OK. If you do not, click Cancel.
Can Merck (MRK) Keep the Beat Streak Alive in Q4 Earnings?
Read MoreHide Full Article
We expect Merck (MRK - Free Report) to beat expectations when it reports fourth-quarter and full-year 2023 results on Feb 1, before market open. In the last reported quarter, the company delivered an earnings surprise of 9.79%.
Factors to Consider
Strong global underlying demand across its business, particularly for cancer drug Keytruda and HPV vaccine Gardasil, is likely to have boosted sales growth in the fourth quarter like several previous quarters.
In oncology, Keytruda sales are likely to have been driven by increased uptake across earlier-stage indications globally, like triple-negative breast cancer and renal cell carcinoma, and continued strong momentum in metastatic indications. The Zacks Consensus Estimate for Keytruda’s sales is $6.48 billion, while our estimate is $6.42 billion.
Higher alliance revenues from Lynparza, driven by increased demand, may have boosted oncology sales. Merck markets Lynparza in partnership with AstraZeneca (AZN - Free Report) .
AstraZeneca and Merck formed a profit-sharing deal to co-market Lynparza and Koselugo in 2017. AstraZeneca and Merck’s Lynparza is approved for four cancer types, ovarian, breast, prostate and pancreatic. Lynparza is also being evaluated in combination with Keytruda in late-stage studies for lung cancer indications.
Alliance revenues from Lenvima may have also boosted oncology sales. In the third quarter, Lenvima revenues benefited from the favorable timing of shipments in China, which is expected to have reversed in the fourth quarter.
With regard to Gardasil, ex-U.S. sales are expected to have been driven by strong demand in international markets like China in the fourth quarter. In the United States, higher pricing is expected to have benefited sales. However, in the third quarter, unfavorable CDC buying patterns hurt sales in the United States. It remains to be seen if the trend reversed in the fourth quarter.
The Zacks Consensus Estimate for Gardasil is $2.06 billion, while our estimate is $2.14 billion.
In the hospital specialty portfolio, increased demand in the United States might have offset the impact of generic competition in Europe for neuromuscular blockade medicine — Bridion injection. The Zacks Consensus Estimate for Bridion is $446 million, while our estimate is $448.0 million.
Lower demand and pricing in the United States and generic competition in certain international markets, mainly Europe, are likely to have hurt sales of the diabetes franchise (Januvia/Janumet). The drugs lost market exclusivity in China and the European Union in September last year.
Last quarter, surprisingly higher sales of Merck’s COVID drug, Lagevrio, due to strong demand in Japan, boosted the top line. It remains to be seen how much the drug contributed in the fourth quarter.
The Zacks Consensus Estimate for Merck’s Pharmaceutical unit is $13.2 billion, while our estimate is $13.0 billion.
The Animal Health franchise’s sales have been lukewarm for the past two quarters. It remains to be seen if the trend improved in the fourth quarter. The Zacks Consensus Estimate for the Animal Health unit is $1.3 billion, while our estimate is $1.28 billion.
Earnings Surprise History
This large drugmaker beat earnings expectations in each of the trailing four quarters. The company delivered a four-quarter earnings surprise of 5.80%, on average.
Merck’s stock has risen 10.4% in the past year compared with an increase of 17.3% for the industry.
Image Source: Zacks Investment Research
Earnings Whispers
Our proven model predicts an earnings beat for Merck in the to-be-reported quarter. A stock needs to have both a positive Earnings ESP and a Zacks Rank #1 (Strong Buy), 2 (Buy) or 3 (Hold) for a likely positive surprise. This is the case here, as elaborated below.
Earnings ESP: Merck’s Earnings ESP is +41.75% as the Most Accurate Estimate is pegged at a loss of 5 cents per share while the Zacks Consensus Estimate is pegged at a loss of 9 cents per share. You can uncover the best stocks to buy or sell before they’re reported with our Earnings ESP Filter.
Zacks Rank: Merck has a Zacks Rank #3.
Other Stocks to Consider
Here are some large drug/biotech stocks that have the right combination of elements to beat on earnings this time around:
Novartis (NVS - Free Report) has an Earnings ESP of +8.22% and a Zacks Rank #3.
Novartis’ stock has risen 17.1% in the past year. Novartis topped earnings estimates in the last four quarters. NVS delivered a four-quarter earnings surprise of 6.99%, on average. Novartis is scheduled to release its fourth-quarter results on Jan 31.
Sanofi’s stock is up 2.8% in the past year. Sanofi beat earnings estimates in three of the last four quarters while missed in one. SNY has a four-quarter earnings surprise of 2.88%, on average. Sanofi is scheduled to release its fourth-quarter results on Feb 1.
Image: Bigstock
Can Merck (MRK) Keep the Beat Streak Alive in Q4 Earnings?
We expect Merck (MRK - Free Report) to beat expectations when it reports fourth-quarter and full-year 2023 results on Feb 1, before market open. In the last reported quarter, the company delivered an earnings surprise of 9.79%.
Factors to Consider
Strong global underlying demand across its business, particularly for cancer drug Keytruda and HPV vaccine Gardasil, is likely to have boosted sales growth in the fourth quarter like several previous quarters.
In oncology, Keytruda sales are likely to have been driven by increased uptake across earlier-stage indications globally, like triple-negative breast cancer and renal cell carcinoma, and continued strong momentum in metastatic indications. The Zacks Consensus Estimate for Keytruda’s sales is $6.48 billion, while our estimate is $6.42 billion.
Higher alliance revenues from Lynparza, driven by increased demand, may have boosted oncology sales. Merck markets Lynparza in partnership with AstraZeneca (AZN - Free Report) .
AstraZeneca and Merck formed a profit-sharing deal to co-market Lynparza and Koselugo in 2017. AstraZeneca and Merck’s Lynparza is approved for four cancer types, ovarian, breast, prostate and pancreatic. Lynparza is also being evaluated in combination with Keytruda in late-stage studies for lung cancer indications.
Alliance revenues from Lenvima may have also boosted oncology sales. In the third quarter, Lenvima revenues benefited from the favorable timing of shipments in China, which is expected to have reversed in the fourth quarter.
With regard to Gardasil, ex-U.S. sales are expected to have been driven by strong demand in international markets like China in the fourth quarter. In the United States, higher pricing is expected to have benefited sales. However, in the third quarter, unfavorable CDC buying patterns hurt sales in the United States. It remains to be seen if the trend reversed in the fourth quarter.
The Zacks Consensus Estimate for Gardasil is $2.06 billion, while our estimate is $2.14 billion.
In the hospital specialty portfolio, increased demand in the United States might have offset the impact of generic competition in Europe for neuromuscular blockade medicine — Bridion injection. The Zacks Consensus Estimate for Bridion is $446 million, while our estimate is $448.0 million.
Lower demand and pricing in the United States and generic competition in certain international markets, mainly Europe, are likely to have hurt sales of the diabetes franchise (Januvia/Janumet). The drugs lost market exclusivity in China and the European Union in September last year.
Last quarter, surprisingly higher sales of Merck’s COVID drug, Lagevrio, due to strong demand in Japan, boosted the top line. It remains to be seen how much the drug contributed in the fourth quarter.
The Zacks Consensus Estimate for Merck’s Pharmaceutical unit is $13.2 billion, while our estimate is $13.0 billion.
The Animal Health franchise’s sales have been lukewarm for the past two quarters. It remains to be seen if the trend improved in the fourth quarter. The Zacks Consensus Estimate for the Animal Health unit is $1.3 billion, while our estimate is $1.28 billion.
Earnings Surprise History
This large drugmaker beat earnings expectations in each of the trailing four quarters. The company delivered a four-quarter earnings surprise of 5.80%, on average.
Merck & Co., Inc. Price and Consensus
Merck & Co., Inc. price-consensus-chart | Merck & Co., Inc. Quote
Merck’s stock has risen 10.4% in the past year compared with an increase of 17.3% for the industry.
Image Source: Zacks Investment Research
Earnings Whispers
Our proven model predicts an earnings beat for Merck in the to-be-reported quarter. A stock needs to have both a positive Earnings ESP and a Zacks Rank #1 (Strong Buy), 2 (Buy) or 3 (Hold) for a likely positive surprise. This is the case here, as elaborated below.
Earnings ESP: Merck’s Earnings ESP is +41.75% as the Most Accurate Estimate is pegged at a loss of 5 cents per share while the Zacks Consensus Estimate is pegged at a loss of 9 cents per share. You can uncover the best stocks to buy or sell before they’re reported with our Earnings ESP Filter.
Zacks Rank: Merck has a Zacks Rank #3.
Other Stocks to Consider
Here are some large drug/biotech stocks that have the right combination of elements to beat on earnings this time around:
Novartis (NVS - Free Report) has an Earnings ESP of +8.22% and a Zacks Rank #3.
Novartis’ stock has risen 17.1% in the past year. Novartis topped earnings estimates in the last four quarters. NVS delivered a four-quarter earnings surprise of 6.99%, on average. Novartis is scheduled to release its fourth-quarter results on Jan 31.
Sanofi (SNY - Free Report) has an Earnings ESP of +13.01% and a Zacks Rank #3. You can see the complete list of today’s Zacks #1 Rank stocks here.
Sanofi’s stock is up 2.8% in the past year. Sanofi beat earnings estimates in three of the last four quarters while missed in one. SNY has a four-quarter earnings surprise of 2.88%, on average. Sanofi is scheduled to release its fourth-quarter results on Feb 1.
Stay on top of upcoming earnings announcements with the Zacks Earnings Calendar.