Merck (MRK) Stock Gains on Beat-and-Raise, Sees Up To $7 Billion in Sales of COVID-19 Drug, Analysts Bullish

October 28, 2021 9:21 AM EDT
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Price: $74.22 -0.89%

Rating Summary:
    18 Buy, 10 Hold, 0 Sell

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    Up: 9 | Down: 11 | New: 61
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Shares of Merck (NYSE: MRK) are up 1.5% in pre-open Thursday after the biotech company delivered better-than-expected Q3 results.

Merck said it earned $1.75 per share to top the analyst estimate of $1.55. Revenue for the quarter came in at $13.2 billion versus the consensus estimate of $12.33 billion.

“Merck delivered another strong quarter with positive momentum across our business and meaningful progress across our pipeline. Our teams continued to excel as we focus on evolving our operations, while driving innovations in our labs that exemplify the best of Merck science,” said Robert M. Davis, chief executive officer and president, Merck.

The company also raised and narrowed its FY21 guidance. MRK is now calling for EPS of $5.65 to $5.70 (below the consensus of $5.77) on sales of $47.4 billion to $47.9 billion (lower than the consensus of $48.16 billion).

Mizuho analyst Mara Goldstein reiterated a Buy rating and a $100.00 per share price target on a strong beat and raised guidance. Merck’s outlook does not reflect sales of molnupiravir, which is incorporated in Mizho’s model and what could help the company beat the Q4 estimates (if the EUA granted).

The company said it is seeking to generate between $5 billion and $7 billion from sales of its experimental COVID-19 drug through the end of next year, including $1 billion this year if the EUA is granted).

“3Q21 EPS report delivered a top-line beat versus Mizuho estimates and Bloomberg consensus, driven by strong sales of KEYTRUDA, GARDASIL, and in animal health,” Goldstein briefly commented.

Cantor Fitzgerald analyst Louise Chen maintained an Overweight rating and a $107.00 per share price target.

“The underlying sales for MRK's key products underscores that growth across oncology, vaccines and animal health, as well as margin expansion opportunities, remain underappreciated, in our view. Therefore, multiple expansion should drive MRK shares higher as earnings visibility improves beyond Keytruda's patent cliff in 2028+,” the analyst said in a client note.

Shares closed at $81.54 yesterday.

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