Merck raised its 2020 adjusted profit outlook as the pharma giant is witnessing high demand for its cancer drug Keytruda as well as for hospital acute care products.
Meanwhile, Merck’s (MRK) 3Q earnings increased 16% to $1.74 year-over-year and beat the Street consensus of $1.44. Sales in the reported quarter rose 1% to $12.6 billion and surpassed analysts’ estimates of $12.2 billion. Keytruda drug sales jumped 21% to $3.7 billion in 3Q, exceeding analysts’ expectations of $3.66 billion.
Merck’s CEO Kenneth C. Frazier said “Demand for our products remains robust, and production, supply and distribution of our medicines, vaccines and animal health products are moving forward with minimal disruption.” Frazier added “we will achieve solid full-year revenue growth despite the impact of the ongoing COVID-19 pandemic.” (See MRK stock analysis on TipRanks).
For 2020, Merck raised its adjusted profit outlook in the range of $5.91-$6.01 per share, compared with its prior forecast of $5.63-$5.78 per share. The drugmaker increased its 2020 revenue forecast to a range of $47.6 billion-$48.6 billion, compared to the earlier forecast of $47.2 billion-$48.7 billion, due to currency impact.
Following the results, Mizuho Securities analyst Mara Goldstein maintained a Buy rating and a price target of $100 (28.2% upside potential). The analyst said “The Organon spin-off is anticipated in 2Q21, at which time the power of MRK’s growth, largely driven by KEYTRUDA, should be more readily visible.”
Currently, the Street has a cautiously optimistic outlook on the stock. The Moderate Buy analyst consensus is based on 8 Buys and 3 Holds. The average price target of $95.82 implies upside potential of about 22.9% to current levels. Shares have dropped by about 14.3% year-to-date.
Related News:
Merck Nabs Expanded Keytruda Label For Hodgkin Lymphoma
Dexcom Drops 9% As Revenue Beat Fails To Impress Investors
Mirati Reports Promising Anti-Tumor Activity For Adagrasib
