In 1Q18, Merck surpassed analysts’ EPS (earnings per share) estimates but missed their revenue estimates. It reported EPS of $1.05 on revenue of $10.0 billion, whereas analysts had expected EPS of $1 on revenue of $10.1 billion.
The above chart shows analysts’ recommendations over the last 12 months. Merck stock has fallen ~9.7% over the last 12 months but has risen ~2.6% in 2018. Analysts’ target price of $68.80 suggests the stock has a ~19.1% return potential over the next 12 months based on its May 4 price of $57.75.
Of the 21 analysts tracking Merck on May 7, six recommended “strong buy,” ten recommended “buy,” and five recommended “hold.” There were no “sell” recommendations. Analysts’ estimates and recommendations change with stock prices and company performance.
The consensus rating for Merck is 2.0, which represents a moderate “buy” for long-term growth and momentum investors. The SPDR S&P Pharmaceuticals ETF (XPH) holds 4.8% of its portfolio in Merck, 4.5% in Eli Lilly (LLY), 4.2% in Johnson & Johnson (JNJ), and 3.9% in Mylan (MYL).
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