Merck shares close lower on Tuesday, company reports better-than-anticipated results in Q1, but expects $2.1 billion hit to full-year revenue

Merck & Company Inc’s (MRK) first-quarter results, reported on Tuesday, exceeded Wall Street estimates.

However, the company warned of a $2.1 billion hit to its full-year revenue, as it expects “reduced demand for its physician-administered products while pandemic-related access measures remain in place.”

Merck shares closed lower for the fourth time in the past ten trading sessions in New York on Tuesday. The stock went down 3.33% ($2.80) to $81.18, after touching an intraday low at $80.20, or a price level not seen since April 23rd ($80.18).

Shares of Merck & Co Inc have retreated 10.74% so far in 2020 compared with an 11.37% loss for the benchmark index, S&P 500 (SPX).

In 2019, Merck & Co’s stock went up 19.03%, thus, it underperformed the S&P 500, which registered a 28.88% gain.

Merck’s total revenue went up 11.5% year-on-year to $12.06 billion during the first quarter, supported by a 45% surge in sales of Keytruda (to $3.28 billion). In comparison, analysts on average had expected revenue of $11.46 billion.

Meanwhile, net income attributable to shareholders went up to $3.22 billion ($1.26 per share) during the first quarter, from $2.92 billion ($1.12 per share) in the same period a year ago.

Earnings per share, which exclude special items, were reported at $1.50 during the latest quarter, while exceeding a consensus of estimates pointing to earnings of $1.34 per share.

Merck & Co also said that it now expected full-year adjusted earnings within the range of $5.17 to $5.37 per share, a revision down from a previous forecast of $5.62 to $5.77 per share.

Analyst stock price forecast and recommendation

According to CNN Money, the 16 analysts, offering 12-month forecasts regarding Merck & Co Inc’s stock price, have a median target of $94.00, with a high estimate of $107.00 and a low estimate of $88.00. The median estimate represents a 15.79% upside compared to the closing price of $81.18 on April 28th.

The same media also reported that at least 12 out of 18 surveyed investment analysts had rated Merck & Co Inc’s stock as “Buy”, while 4 – as “Hold”.

TradingPedia.com is a financial media specialized in providing daily news and education covering Forex, equities and commodities. Our academies for traders cover Forex, Price Action and Social Trading.

Related News