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Analysts’ Recommendations for Merck & Co. after 4Q17

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Wall Street analysts’ estimates

Merck & Co. (MRK) missed Wall Street analysts’ estimates for revenues but surpassed analysts’ estimates earnings per share (or EPS). Merck reported EPS of $0.98 on revenues of $10.4 billion in 4Q17. Its estimated earnings per share were $0.94 on revenues of $10.5 billion. 

Merck missed revenue estimates but surpassed estimates for EPS for fiscal 2017. For 2017, the company reported EPS of $3.98 on revenues of $40.1 billion compared to its estimated EPS of $3.94 on revenues of $40.2 billion.

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The chart above shows analysts’ recommendations over the last 12 months. The revenues for Merck are driven by key products such as its Gardasil vaccines and Keytruda, its blockbuster drugs. However, Zetia, Vytorin, and Remicade are losing their market share to competition from other products in the market.

Analysts’ ratings

Merck & Co.’s stock price has fallen ~14.5% over the last 12 months, and it has fallen ~2.5% in 2018 year-to-date. Analysts’ estimates show that the stock has the potential to return ~22.1% over the next 12 months. 

Analysts’ recommendations show a 12-month target price of $67.00 per share compared to its price of $54.87 per share on February 9, 2018.

Analysts’ recommendations

On February 12, 2018, 22 analysts tracked Merck & Co. Of these 22 analysts, 13 analysts recommended a “buy,” while nine analysts recommended a “hold.” None of the analysts recommended a “sell” for Merck & Co.

The consensus rating for Merck & Co. stands at ~2.1, which represents a moderate buy for long-term growth investors and value investors.

Remicade, a drug for rheumatoid arthritis, is marketed by Merck & Co. (MRK) outside the US, while Johnson & Johnson (JNJ) markets the drug in the US. Other drugs for the treatment of rheumatoid arthritis include Pfizer’s (PFE) and Amgen’s (AMGN) Enbrel, as well as AbbVie’s (ABBV) Humira.

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