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Merck Q4 Earnings Coming Up: Buy, Hold or Sell MRK Stock Now?
MRKMerck(MRK) ZACKS·2025-01-28 15:26

Core Viewpoint - Merck (MRK) is set to report its fourth-quarter and full-year 2024 earnings on February 4, with sales and earnings estimates at 15.56billionand15.56 billion and 1.72 per share respectively. However, earnings estimates for 2025 have seen a decline from 9.57to9.57 to 9.44 per share over the past month [1][2]. Earnings Estimates and Trends - The current earnings estimates for Q1, Q2, and 2025 are 1.72,1.72, 2.23, and 9.44persharerespectively,showingadownwardtrendcomparedtopreviousestimates[2].−TheearningssurprisehistoryindicatesthatMerckhasexceededearningsexpectationsinthelastfourquarters,withanaveragesurpriseof37.579.44 per share respectively, showing a downward trend compared to previous estimates [2]. - The earnings surprise history indicates that Merck has exceeded earnings expectations in the last four quarters, with an average surprise of 37.57% [5]. Factors Influencing Upcoming Results - Keytruda, Merck's cancer drug, is expected to drive top-line growth in Q4, supported by increased patient demand and additional indications [7]. - Keytruda's sales are estimated at 7.73 billion, with the company's own estimate at 7.62billion,reflectingstronguptakeinearly−stagenon−smallcelllungcancer[8].−AlliancerevenuesfromLynparzaandLenvimaareanticipatedtocontributepositivelytooncologysales,whilesalesoftheHPVvaccineGardasilmaybenegativelyimpactedbylowerdemandinChina[9][11].SalesPerformancebyProduct−Thepharmaceuticalunit′ssalesestimateis7.62 billion, reflecting strong uptake in early-stage non-small cell lung cancer [8]. - Alliance revenues from Lynparza and Lenvima are anticipated to contribute positively to oncology sales, while sales of the HPV vaccine Gardasil may be negatively impacted by lower demand in China [9][11]. Sales Performance by Product - The pharmaceutical unit's sales estimate is 13.9 billion, with the company's estimate slightly higher at 13.97billion[15].−TheAnimalHealthsegmentisexpectedtoseegrowth,withestimatesforthisunitat13.97 billion [15]. - The Animal Health segment is expected to see growth, with estimates for this unit at 1.34 billion [15]. Valuation and Stock Performance - Merck's stock has declined by 19.2% over the past year, underperforming the industry and the S&P 500 [17]. - The company's shares trade at a forward P/E ratio of 10.30, which is lower than the industry average of 16.0 and its own 5-year mean of 13.28, indicating attractive valuation [19]. Investment Thesis - Merck has a strong portfolio with over six blockbuster drugs, primarily driven by Keytruda. However, the company is heavily reliant on this drug, which is set to lose patent exclusivity in 2028 [22][24]. - Despite challenges, Merck's strong cash position of $14.6 billion provides opportunities for strategic acquisitions to bolster its pipeline [24]. - Long-term growth is expected to be driven by Keytruda and new products, while short-term investors may consider selling due to potential delays in strong earnings growth [25].