Q3 Preview: Merck (MRK) Trading Strong Into Earnings, Looks to Nearly Double-Up Revs Y/Y (PFE, GSK, SNY)
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Merck & Co. Inc. (NYSE: MRK) is trading higher ahead of the company's third quarter earnings report, expected out before the market open tomorrow, October 29, 2010. Shares are up 1.1% in afternoon trading.
MRK is expected to report an EPS of $0.82 on revs of $11.23 billion. The Whitehouse Station, NJ-based drug maker posted an EPS of $0.86 on revs of $11.30 billion, mixed to the consensus EPS of $0.83 and revs of $11.45 billion. For the third quarter in 2009, the SINGULAR maker had an adjusted earnings per share of $0.80 on revs of $5.94 billion, again, mixed to the consensus.
Shares of the company gained about 8% through the quarter, to $36.81 at the end of September. The stock is relatively flat since the end of the quarter, and up 2.9% on the year.
A simple valuation has Merck with a forward P/E of 9.7x next year's EPS estimates, compared to 9.9x for Glaxo (NYSE: GSK), 7.4x at sanofi-aventis (NYSE: SNY), and 7.6x at Pfizer (NYSE: PFE).
Data from Bloomberg has 18 analysts with a Buy rating on MRK, 7 with a Hold, and none suggesting to Sell. The analyst price target average is $40, with a high of $48 and a low of $36.
Summary
Merck is expected to highlight three new products launched in the quarter: Dulera, Daxas, and Brinavess. Information about their Hep-C treatment, boceprevir, should be coming out over the weekend at the AASLD meeting. Boceprevir is currently in phase 3, but many believe that telaprevir is the more potent choice when combating Hep-C, allowing for a shorter therapeutic course in patients.
Deutsche Bank cites relatively high European market exposure (about 28% of pharma sales) translating to neutral-to-modestly negative FX and higher pressures on pricing in the Eurozone. Specifically, "Declines in international sales from the loss of marketing exclusivity in EU markets for both Cozaar and Temodar in 1Q’10 should be offset to some extent by ongoing launches (mostly in O-US markets) for Bridiron, Simponi, Tredaptive, Daxas, Dulera, Brivaness and Saphris (US only, MRK sold asenapine ex-US rights excluding Japan and China, to Lundbeck), and growth of products recently launched in the important Japanese market, especially Januvia." Offsetting factors could be performance by some of their key revenue drivers (Januvia/Janument, Remicade, and Isentress). DB has Merck reporting an EPS of $0.83 on revs of $11.09 billion.
Merck & Co. is expected to release their Q310 earnings on Friday, October 29, 2010, at approximately 7:00am EDT. Stay tuned to StreetInsider.com's EPS Central section to see our analysis of the highly-anticipated quarterly results within seconds of their release.
MRK is expected to report an EPS of $0.82 on revs of $11.23 billion. The Whitehouse Station, NJ-based drug maker posted an EPS of $0.86 on revs of $11.30 billion, mixed to the consensus EPS of $0.83 and revs of $11.45 billion. For the third quarter in 2009, the SINGULAR maker had an adjusted earnings per share of $0.80 on revs of $5.94 billion, again, mixed to the consensus.
Shares of the company gained about 8% through the quarter, to $36.81 at the end of September. The stock is relatively flat since the end of the quarter, and up 2.9% on the year.
A simple valuation has Merck with a forward P/E of 9.7x next year's EPS estimates, compared to 9.9x for Glaxo (NYSE: GSK), 7.4x at sanofi-aventis (NYSE: SNY), and 7.6x at Pfizer (NYSE: PFE).
Data from Bloomberg has 18 analysts with a Buy rating on MRK, 7 with a Hold, and none suggesting to Sell. The analyst price target average is $40, with a high of $48 and a low of $36.
Summary
Merck is expected to highlight three new products launched in the quarter: Dulera, Daxas, and Brinavess. Information about their Hep-C treatment, boceprevir, should be coming out over the weekend at the AASLD meeting. Boceprevir is currently in phase 3, but many believe that telaprevir is the more potent choice when combating Hep-C, allowing for a shorter therapeutic course in patients.
Deutsche Bank cites relatively high European market exposure (about 28% of pharma sales) translating to neutral-to-modestly negative FX and higher pressures on pricing in the Eurozone. Specifically, "Declines in international sales from the loss of marketing exclusivity in EU markets for both Cozaar and Temodar in 1Q’10 should be offset to some extent by ongoing launches (mostly in O-US markets) for Bridiron, Simponi, Tredaptive, Daxas, Dulera, Brivaness and Saphris (US only, MRK sold asenapine ex-US rights excluding Japan and China, to Lundbeck), and growth of products recently launched in the important Japanese market, especially Januvia." Offsetting factors could be performance by some of their key revenue drivers (Januvia/Janument, Remicade, and Isentress). DB has Merck reporting an EPS of $0.83 on revs of $11.09 billion.
Merck & Co. is expected to release their Q310 earnings on Friday, October 29, 2010, at approximately 7:00am EDT. Stay tuned to StreetInsider.com's EPS Central section to see our analysis of the highly-anticipated quarterly results within seconds of their release.
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