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.
Merck (MRK) Q4 Earnings Coming Up: What's in the Cards?
Read MoreHide Full Article
Merck & Co., Inc. (MRK - Free Report) will report fourth-quarter and full-year 2018 results on Feb 1 before market open. In the last reported quarter, the company delivered a positive earnings surprise of 2.59%.
Merck’s performance has been pretty impressive, with the company exceeding earnings expectations in all the trailing four quarters. The average positive earnings surprise over the last four quarters is 3.96%.
Merck’s shares have outperformed the industry in the past year. It has risen 18.3% in the said time frame against a 6.6% decrease for the industry.
Let’s see how things are shaping up for this announcement.
Factors to Consider
Merck’s new products like cancer drug, Keytruda, Gardasil vaccine and Bridion injection should continue to drive the top line this quarter driven by strong demand trends. Alliance revenues from Lynparza and Lenvima should also boost oncology sales.
However, loss of market exclusivity for several drugs, softness in the diabetes (Januvia/Janumet) franchise, and lower sales of key products like Zostavax and Zepatier due to competitive pressure may hurt sales.
Keytruda sales are likely to be driven by the launch of new indications globally. Keytruda sales are gaining particularly from strong momentum in the indication of first-line lung cancer as it is the only anti-PD-1 approved in the first-line setting.
In October, Keytruda gained FDA and EU approval to include overall survival data from a key late-stage lung cancer study, KEYNOTE-189 study on its label. It was also approved for metastatic merkel cell carcinoma, a rare form of skin cancer in the United States and for high-risk stage III melanoma patients in the adjuvant setting in the EU in December. These label expansion approvals should drive sales of Keytruda in the future quarters.
Strong demand in most markets is driving sales of Bridion (sugammadex) Injection – a trend which is expected to be reflected in the fourth-quarter results. Bridion was launched in China in the third quarter, which can bring in additional sales.
In the third quarter, Merck received FDA approval for Gardasil 9 in an expanded patient population (women and men ages 27 to 45), which can bring in additional sales of the vaccine in the fourth quarter.
However, rising competitive pressure is hurting sales of relatively newer drugs like Zostavax and Zepatier. Zepatier sales are going down sharply due to reduction in patient volume due to increasing competition. Zostavax sales will continue to be hurt by strong competition from Glaxo’s (GSK - Free Report) newly approved shingles vaccines, Shingrix. Among the older products, while continued pricing pressure is hurting sales of the diabetes franchise (Januvia/Janumet), lower demand in the United States and competitive pricing pressure in Europe is hurting sales of Isentress.
Animal health franchise sales should remain strong in the fourth quarter.
Meanwhile, higher R&D costs will hurt profits due to increased clinical development spending for Lynparza and Lenvima and investment in early drug development.
Earnings Whispers
Our proven model does not conclusively show that Merck will beat on earnings this quarter. This is because a stock needs to have both a positive Earnings ESP and a Zacks Rank #1 (Strong Buy), 2 (Buy) or 3 (Hold) for this to happen. That is not the case here, as you will see below.
Earnings ESP: Its Earnings ESP is 0.00% as both the Zacks Consensus Estimate and the Most Accurate Estimate is pegged at $1.03. You can uncover the best stocks to buy or sell before they’re reported with our Earnings ESP Filter.
Zacks Rank: Merck’s Zacks Rank #3 increases the predictive power of ESP. However, we need to have a positive ESP to be confident about an earnings beat.
We caution against Sell-rated stocks (Zacks Rank #4 or 5) going into the earnings announcement, especially when the company is seeing negative estimate revisions.
Stocks to Consider
Large pharma stocks that have both a positive ESP and a favorable Zacks Rank include:
Novo Nordisk A/S (NVO - Free Report) has an Earnings ESP of +0.89% and a Zacks Rank #3. The company is slated to release results on Feb 1.
Zacks' Top 10 Stocks for 2019
In addition to the stocks discussed above, would you like to know about our 10 finest buy-and-holds for the year?
Who wouldn't? Our annual Top 10s have beaten the market with amazing regularity. In 2018, while the market dropped -5.2%, the portfolio scored well into double-digits overall with individual stocks rising as high as +61.5%. And from 2012-2017, while the market boomed +126.3, Zacks' Top 10s reached an even more sensational +181.9%.
Image: Bigstock
Merck (MRK) Q4 Earnings Coming Up: What's in the Cards?
Merck & Co., Inc. (MRK - Free Report) will report fourth-quarter and full-year 2018 results on Feb 1 before market open. In the last reported quarter, the company delivered a positive earnings surprise of 2.59%.
Merck’s performance has been pretty impressive, with the company exceeding earnings expectations in all the trailing four quarters. The average positive earnings surprise over the last four quarters is 3.96%.
Merck’s shares have outperformed the industry in the past year. It has risen 18.3% in the said time frame against a 6.6% decrease for the industry.
Let’s see how things are shaping up for this announcement.
Factors to Consider
Merck’s new products like cancer drug, Keytruda, Gardasil vaccine and Bridion injection should continue to drive the top line this quarter driven by strong demand trends. Alliance revenues from Lynparza and Lenvima should also boost oncology sales.
However, loss of market exclusivity for several drugs, softness in the diabetes (Januvia/Janumet) franchise, and lower sales of key products like Zostavax and Zepatier due to competitive pressure may hurt sales.
Keytruda sales are likely to be driven by the launch of new indications globally. Keytruda sales are gaining particularly from strong momentum in the indication of first-line lung cancer as it is the only anti-PD-1 approved in the first-line setting.
In October, Keytruda gained FDA and EU approval to include overall survival data from a key late-stage lung cancer study, KEYNOTE-189 study on its label. It was also approved for metastatic merkel cell carcinoma, a rare form of skin cancer in the United States and for high-risk stage III melanoma patients in the adjuvant setting in the EU in December. These label expansion approvals should drive sales of Keytruda in the future quarters.
Strong demand in most markets is driving sales of Bridion (sugammadex) Injection – a trend which is expected to be reflected in the fourth-quarter results. Bridion was launched in China in the third quarter, which can bring in additional sales.
In the third quarter, Merck received FDA approval for Gardasil 9 in an expanded patient population (women and men ages 27 to 45), which can bring in additional sales of the vaccine in the fourth quarter.
However, rising competitive pressure is hurting sales of relatively newer drugs like Zostavax and Zepatier. Zepatier sales are going down sharply due to reduction in patient volume due to increasing competition. Zostavax sales will continue to be hurt by strong competition from Glaxo’s (GSK - Free Report) newly approved shingles vaccines, Shingrix. Among the older products, while continued pricing pressure is hurting sales of the diabetes franchise (Januvia/Janumet), lower demand in the United States and competitive pricing pressure in Europe is hurting sales of Isentress.
Animal health franchise sales should remain strong in the fourth quarter.
Meanwhile, higher R&D costs will hurt profits due to increased clinical development spending for Lynparza and Lenvima and investment in early drug development.
Earnings Whispers
Our proven model does not conclusively show that Merck will beat on earnings this quarter. This is because a stock needs to have both a positive Earnings ESP and a Zacks Rank #1 (Strong Buy), 2 (Buy) or 3 (Hold) for this to happen. That is not the case here, as you will see below.
Earnings ESP: Its Earnings ESP is 0.00% as both the Zacks Consensus Estimate and the Most Accurate Estimate is pegged at $1.03. You can uncover the best stocks to buy or sell before they’re reported with our Earnings ESP Filter.
Zacks Rank: Merck’s Zacks Rank #3 increases the predictive power of ESP. However, we need to have a positive ESP to be confident about an earnings beat.
We caution against Sell-rated stocks (Zacks Rank #4 or 5) going into the earnings announcement, especially when the company is seeing negative estimate revisions.
Stocks to Consider
Large pharma stocks that have both a positive ESP and a favorable Zacks Rank include:
AstraZeneca, plc (AZN - Free Report) has an Earnings ESP of +8.00% and a Zacks Rank of 3. The company is scheduled to report fourth-quarter earnings on Feb 14. You can see the complete list of today’s Zacks #1 Rank stocks here.
Novo Nordisk A/S (NVO - Free Report) has an Earnings ESP of +0.89% and a Zacks Rank #3. The company is slated to release results on Feb 1.
Zacks' Top 10 Stocks for 2019
In addition to the stocks discussed above, would you like to know about our 10 finest buy-and-holds for the year?
Who wouldn't? Our annual Top 10s have beaten the market with amazing regularity. In 2018, while the market dropped -5.2%, the portfolio scored well into double-digits overall with individual stocks rising as high as +61.5%. And from 2012-2017, while the market boomed +126.3, Zacks' Top 10s reached an even more sensational +181.9%.
See Latest Stocks Today >>