Merck (MRK) Pops After Beat-and-raise, Analyst Praises a 'Strong' Beat

Merck (NYSE: MRK) delivered higher-than-expected top and bottom-line numbers for its third quarter, allowing it to raise its full-year guidance.

Merck posted a Q3 EPS of $1.85 on revenue of $15 billion to beat the analyst estimate of EPS of $1.75 on sales of $14.07 billion. Revenue from Lageviro (molnupiravir) and Keytruda came in at $436 million and $5.43 billion, respectively, higher than the estimate of $190.8 million and $5.34 billion.

Merck raised its full-year guidance to $7.32-7.35 in EPS, up from the prior $7.25-7.35 range. Revenue is now seen between $58.5 and $59 billion, an increase from the $57.5-58.5 billion range. Both topped the Bloomberg-compiled consensus while Merck said that its FY outlook includes a negative impact from FX of about 4%.

Full-year revenue from Lageviro is now seen at between $5.2 billion and $5.4 billion, up from the prior range of $5 billion to $5.5 billion.

Mizuho analyst Mara Goldstein said Merck delivered “strong top & bottom line beats.” She added that the negative impact from FX was “larger than previously expected.”

Cantor Fitzgerald analyst Louise Chen reiterated an Overweight rating and a $107 per share price target on MRK stock.

“The robust sales for MRK's key products (KEYTRUDA, GARDASIL and others) underscore that growth across oncology, vaccines and animal health, as well as margin expansion opportunities, remain under-appreciated, in our view. Therefore, we believe multiple expansion should potentially drive MRK shares higher as earnings visibility improves beyond Keytruda's patent cliff in 2028+,” the analyst said.

Merck shares are up almost 2% in pre-market Thursday.

By Senad Karaahmetovic

You May Also Be Interested In

• SanDisk and Micron surge as Apple confirms memory price pass-through
• Vail Resorts taps bankers for potential activist defense, Semafor reports
• Citi sees this stock as primary lithium demand beneficiary, upgrades to Buy