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Will Merck (MRK) Keep the Earnings Streak Alive in Q4?
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We expect Merck (MRK - Free Report) to beat expectations when it reports fourth-quarter and full-year 2020 results on Feb 4, before market open. In the last-reported quarter, the company delivered an earnings surprise of 20.83%.
The large drugmaker’s performance has been pretty impressive, with the company exceeding earnings expectations in each of the trailing four quarters. The company delivered a four-quarter earnings surprise of 12.67%, on average.
Merck’s stock has declined 11.5% in the past year against an increase of 5% for the industry.
Factors to Consider
In the fourth quarter, the company expects some residual negative impacts from COVID-19 on prescription trends of some drugs primarily in Europe and certain emerging markets.
In oncology drugs, Keytruda sales are likely to have been driven by continued strong momentum in first-line lung cancer indication and launch in newer indications. The Zacks Consensus Estimate for Keytruda’s sales is $3.82 billion. Alliance revenues from Lynparza and Lenvima may have contributed to higher oncology sales. Please note that Merck markets Lynparza in partnership with AstraZeneca (AZN - Free Report) .
In the hospital specialty portfolio, demand trends ofBridion Injection are likely to have continued to improve following recovery in elective surgical procedures. The Zacks Consensus Estimate for Bridion is $383 million.
Meanwhile, the top line is expected to have borne the impact of loss of U.S. market exclusivity for Remicade, Noxafil, Emend, Cubicin, Nuvaring and Vytorinand competitive pressure for the diabetes franchise (Januvia/Janumet). Merck markets Remicade in partnership with J&J (JNJ - Free Report) .
In the vaccines portfolio, sales of Gardasil vaccine declined in the past two quarters due to the impact of the pandemic. The phasing of the recovery for Gardasil is slower than expected, largely due to the impact of the pandemic on the back-to-school season, particularly in the United States. It remains to be seen if there was some improvement in the fourth quarter when the company reports. The Zacks Consensus Estimate for Gardasil is $791 million. The Zacks Consensus Estimate for total vaccines is $2.01 billion.
The Animal Health franchise is likely to have seen continued strong sales growth driven by higher demand. A minimal impact of the pandemic on the segment is expected in the fourth-quarter results.The Zacks Consensus Estimate for Animal Health unit is $1.14 billion.
Key Recent Development
Last month, Merck said it is discontinuing development of its two COVID-19 vaccine candidates, V590 and V591, which were in early-stage studies. Merck took the decision due to inferior immune responses observed for patients, given the two vaccines in phase I studies compared to those seen in patients who were infected naturally and those reported for other COVID-19 vaccines.
Merck, however, continues to develop its two therapeutics for COVID-19, its oral antiviral candidate molnupiravir/MK-4482 (phase II/III) and biological therapeutic, MK-7110 (phase III). MK-4482 is being developed in collaboration with Ridgeback Bio. Two pivotal studies are evaluating the candidate in non-hospitalized adult COVID-19 patients or hospitalized adult COVID-19 patients.
For MK-7110 (formerly CD24Fc), Merck has a supply agreement with the U.S. government to advance its manufacturing and initial distribution.
In December, it reached an agreement with the U.S. government to manufacture and supply approximately 60,000-100,000 doses of MK-7110, upon potential approval or an Emergency Use Authorization from the FDA.
Earnings Whispers
Our proven model predicts an earnings beat for Merck in the soon-to-be-reported quarter because it has the right combination of two key ingredients. A stock needs to have both a positive Earnings ESP and a Zacks Rank #1 (Strong Buy), 2 (Buy) or 3 (Hold) for a likely earnings surprise.
Earnings ESP: Merck’s Earnings ESP is +2.27% as the Zacks Consensus Estimate of $1.36 is lower than the Most Accurate Estimate of $1.40. You can uncover the best stocks to buy or sell before they’re reported with our Earnings ESP Filter.
Zacks Rank: Merck has a Zacks Rank #3.
Another Stock to Consider
Here is another large drug stock that has the right combination of elements to beat on earnings this time around
From thousands of stocks, 5 Zacks experts each have chosen their favorite to skyrocket +100% or more in months to come. From those 5, Director of Research Sheraz Mian hand-picks one to have the most explosive upside of all.
You know this company from its past glory days, but few would expect that it’s poised for a monster turnaround. Fresh from a successful repositioning and flush with A-list celeb endorsements, it could rival or surpass other recent Zacks’ Stocks Set to Double like Boston Beer Company which shot up +143.0% in a little more than 9 months and Nvidia which boomed +175.9% in one year.
Image: Shutterstock
Will Merck (MRK) Keep the Earnings Streak Alive in Q4?
We expect Merck (MRK - Free Report) to beat expectations when it reports fourth-quarter and full-year 2020 results on Feb 4, before market open. In the last-reported quarter, the company delivered an earnings surprise of 20.83%.
The large drugmaker’s performance has been pretty impressive, with the company exceeding earnings expectations in each of the trailing four quarters. The company delivered a four-quarter earnings surprise of 12.67%, on average.
Merck & Co., Inc. Price and EPS Surprise
Merck & Co., Inc. price-eps-surprise | Merck & Co., Inc. Quote
Merck’s stock has declined 11.5% in the past year against an increase of 5% for the industry.
Factors to Consider
In the fourth quarter, the company expects some residual negative impacts from COVID-19 on prescription trends of some drugs primarily in Europe and certain emerging markets.
In oncology drugs, Keytruda sales are likely to have been driven by continued strong momentum in first-line lung cancer indication and launch in newer indications. The Zacks Consensus Estimate for Keytruda’s sales is $3.82 billion. Alliance revenues from Lynparza and Lenvima may have contributed to higher oncology sales. Please note that Merck markets Lynparza in partnership with AstraZeneca (AZN - Free Report) .
In the hospital specialty portfolio, demand trends ofBridion Injection are likely to have continued to improve following recovery in elective surgical procedures. The Zacks Consensus Estimate for Bridion is $383 million.
Meanwhile, the top line is expected to have borne the impact of loss of U.S. market exclusivity for Remicade, Noxafil, Emend, Cubicin, Nuvaring and Vytorinand competitive pressure for the diabetes franchise (Januvia/Janumet). Merck markets Remicade in partnership with J&J (JNJ - Free Report) .
In the vaccines portfolio, sales of Gardasil vaccine declined in the past two quarters due to the impact of the pandemic. The phasing of the recovery for Gardasil is slower than expected, largely due to the impact of the pandemic on the back-to-school season, particularly in the United States. It remains to be seen if there was some improvement in the fourth quarter when the company reports. The Zacks Consensus Estimate for Gardasil is $791 million. The Zacks Consensus Estimate for total vaccines is $2.01 billion.
The Animal Health franchise is likely to have seen continued strong sales growth driven by higher demand. A minimal impact of the pandemic on the segment is expected in the fourth-quarter results.The Zacks Consensus Estimate for Animal Health unit is $1.14 billion.
Key Recent Development
Last month, Merck said it is discontinuing development of its two COVID-19 vaccine candidates, V590 and V591, which were in early-stage studies. Merck took the decision due to inferior immune responses observed for patients, given the two vaccines in phase I studies compared to those seen in patients who were infected naturally and those reported for other COVID-19 vaccines.
Merck, however, continues to develop its two therapeutics for COVID-19, its oral antiviral candidate molnupiravir/MK-4482 (phase II/III) and biological therapeutic, MK-7110 (phase III). MK-4482 is being developed in collaboration with Ridgeback Bio. Two pivotal studies are evaluating the candidate in non-hospitalized adult COVID-19 patients or hospitalized adult COVID-19 patients.
For MK-7110 (formerly CD24Fc), Merck has a supply agreement with the U.S. government to advance its manufacturing and initial distribution.
In December, it reached an agreement with the U.S. government to manufacture and supply approximately 60,000-100,000 doses of MK-7110, upon potential approval or an Emergency Use Authorization from the FDA.
Earnings Whispers
Our proven model predicts an earnings beat for Merck in the soon-to-be-reported quarter because it has the right combination of two key ingredients. A stock needs to have both a positive Earnings ESP and a Zacks Rank #1 (Strong Buy), 2 (Buy) or 3 (Hold) for a likely earnings surprise.
Earnings ESP: Merck’s Earnings ESP is +2.27% as the Zacks Consensus Estimate of $1.36 is lower than the Most Accurate Estimate of $1.40. You can uncover the best stocks to buy or sell before they’re reported with our Earnings ESP Filter.
Zacks Rank: Merck has a Zacks Rank #3.
Another Stock to Consider
Here is another large drug stock that has the right combination of elements to beat on earnings this time around
Sanofi (SNY - Free Report) has an Earnings ESP of +8.52% and a Zacks Rank #3. You can see the complete list of today’s Zacks #1 Rank stocks here.
Zacks Names “Single Best Pick to Double”
From thousands of stocks, 5 Zacks experts each have chosen their favorite to skyrocket +100% or more in months to come. From those 5, Director of Research Sheraz Mian hand-picks one to have the most explosive upside of all.
You know this company from its past glory days, but few would expect that it’s poised for a monster turnaround. Fresh from a successful repositioning and flush with A-list celeb endorsements, it could rival or surpass other recent Zacks’ Stocks Set to Double like Boston Beer Company which shot up +143.0% in a little more than 9 months and Nvidia which boomed +175.9% in one year.
Free: See Our Top Stock and 4 Runners Up >>