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Analyst Ratings and Recommendations for Merck & Co.

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Feb. 1 2018, Updated 10:32 a.m. ET

Wall Street analyst estimates

Wall Street analysts estimate Merck & Co.’s (MRK) top line to increase 3.7% to $10.5 billion for 4Q17 compared to $10.1 billion in 4Q16. Merck’s revenues are estimated to increase 1% to $40.2 billion for 2017 compared to $39.8 billion for 2016.

The above chart shows analysts’ recommendations over the last 12 months. Merck’s revenues are expected to be driven by strong sales of Keytruda and other products, partially offset by lower sales of Remicade, Zetia, Vytorin, and other drugs covered in the previous articles.

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Analyst ratings

Merck stock has fallen 1.2% over the last 12 months but has risen 7.9% in 2018 year-to-date. Analyst estimates show that the stock has a potential to return 10.5% over the next 12 months. Analyst recommendations show a 12-month target price of $67.09 per share compared to $61.63 per share on January 29, 2018.

Analyst recommendations

As of January 30, 2018, there are 23 analysts tracking Merck & Co. Fourteen of them recommend a “buy,” and nine recommend a “hold.” None of them recommend a “sell.” Changes in analyst estimates and recommendations are based on changing trends in the stock and the performance of the company.

The consensus rating for Merck is 2.13, which represents a “buy” for both long-term growth investors and value investors.

Merck’s valuation

As of January 30, 2018, Merck & Co. is trading at a forward PE (price-to-earnings) multiple of 14.9x, which is lower than the industry average of 16.4x. It’s also trading at a forward EV-to-EBITDA (enterprise value to earnings before interest, tax, depreciation, and amortization) multiple of 11.4x, which is lower than the industry average of 13.5x.

The VanEck Vectors Pharmaceutical ETF (PPH) holds 5% of its total investments in Merck & Co. (MRK), 4.8% in Pfizer (PFE), 4.9% in AstraZeneca (AZN), and 4.6% in Bristol-Myers Squibb (BMY).

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