uploads///Graph

Merck or AbbVie: Which Has the More Robust Revenue Trajectory?

By

Jan. 14 2019, Updated 12:40 p.m. ET

Revenue guidance

During its third-quarter earnings conference presentation, Merck & Co. (MRK) announced a change in its 2018 revenue forecast range from $42.0 billion–$42.8 billion to $42.1 billion–$42.7 billion. The new guidance, however, maintains the midpoint of the estimated revenue range at $42.4 billion. The company expects to witness 5%–6% YoY (year-over-year) revenue growth in 2018. Additionally, according to the company’s third-quarter earnings conference call, it also expects a small impact on its 2018 revenue attributable to foreign exchange at mid-October rates.

Article continues below advertisement

During its 37th Annual J.P. Morgan Healthcare Brokers Conference presentation, AbbVie (ABBV) projected its net revenue for 2018 to be $32.7 billion, YoY operational growth of 15%. The company reported a CAGR (compound annual growth rate) of 11.7% in revenue from 2013 to 2018. According to the company’s third-quarter earnings conference call, it expects a favorable revenue impact of lower than 1% due to foreign currency fluctuations in 2018.

Wall Street estimates

Wall Street analysts expect Merck’s revenues to be $42.31 billion, $44.53 billion, and $46.98 billion, respectively, in 2018, 2019, and 2020, implying YoY revenue rises of 5.45%, 5.25%, and 5.50%.

On the other hand, Wall Street analysts expect AbbVie’s revenues to be $32.79 billion, $33.60 billion, and $35.64 billion, respectively, in 2018, 2019, and 2020, implying YoY revenue rises of 16.20%, 2.48%, and 6.08%.

Merck & Co. is expected to report a gradual rise in revenue from 2018 to 2020, while AbbVie is expected to report a more volatile revenue growth trajectory in the same timeframe.

In the next article, we’ll compare the earnings growth prospects of Merck & Co. and AbbVie in greater detail.

Advertisement

More From Market Realist