Higher Keytruda Sales To Drive Merck's Q1?

Core Viewpoint - Merck is expected to report Q1 2024 results with revenue of $15.2 billion and adjusted earnings of $1.97, driven primarily by Keytruda and Gardasil sales growth [1][4]. Financial Performance - Merck's stock has increased by 55% from $80 in January 2021 to approximately $125 currently, outperforming the S&P 500's 35% increase during the same period [1]. - The stock performance has been inconsistent, with returns of -6% in 2021, 45% in 2022, and -2% in 2023, underperforming the S&P 500 in 2021 and 2023 [2]. - The previous quarter's revenue was $14.6 billion, a 6% year-over-year increase, primarily due to Keytruda and Gardasil sales [4]. Key Growth Drivers - Keytruda is projected to generate around $7 billion in quarterly sales, reflecting high teens year-over-year growth, while Gardasil is expected to see mid-teens sales growth [1][5]. - Keytruda has received five new U.S. FDA approvals since October, which is anticipated to support its sales growth [5]. - Gardasil is experiencing strong demand in China, a trend expected to continue [5]. Valuation and Market Position - Merck's current valuation is estimated at $134 per share, closely aligned with its market price of $127, trading at 5x revenues compared to a 4.5x average over the last five years [3]. - The company expects full-year 2024 revenue to be between $62.7 billion and $64.2 billion, with earnings projected between $8.44 and $8.59 per share [4].