A Chance to Add More to Stakes in Merck
Merck & Company quickly lost about 4% of its market value in the pre-market trading on July 30, to re-test its major $120 to $122.50 technical support area. This was an immediate response to the drug giant's updating its own earnings forecast for the rest of the year. Merck CEOs adjusted their guidance to a range between $7.94 and $8.04, from previous estimates of $8.53 to $8.65 per share. Yet, the main reasons for lower forecasts were seemingly boiling down to one-time charges from an acquisition of eye-focused drug developer EyeBio, which cost nearly $1.3 billion, or $0.51 per share. Consensus expectations at $8.16 per share included this factor into consideration, and so nothing extraordinary happened from our point of view.
Meanwhile, Merck business continued to win. Keytruda medicine for cancer immunotherapy, which used to make the largest revenue contribution, jumped above $30 billion annually, hitting $7.3 billion in the quarter, up 16% YoY vs expected numbers of slightly above $7.1 billion. Besides, Merck launched a drug Winrevair for a rare lung condition called pulmonary arterial hypertension. Many feel Winrevair may have a blockbuster potential, as it already gave $70 million in sales, which is higher than the most bullish estimates. Sales of Gardasil, a vaccine widely used in the prevention of human papillomavirus, were also growing. The company's boss Robert Davis separately emphasized Merck's participation in vaccine programs, including the US FDA regulatory approval and CDC's (The Centers for Disease Control and Prevention) recommendation for a pneumococcal vaccine, and positive results from a trial of an investigational RSV (respiratory syncytial virus) preventative monoclonal antibody for infants.
From a pure financial point of view, the company raised its full-year 2024 sales projections to a slightly higher range of $63.4 billion to $64.4 billion. Merck's sales globally rose by 7% to $16.1 billion, above average expectations of $15.8 billion, sales added 11% if the Wall Street crowd takes into account adjusting for currency exchange impacts. On Tuesday Merck also revealed $5.5 billion of Q2 profit, or $2.14 per share. Excluding this one-time stuff, the last quarter brought $2.28 per share vs consensus expectations of $2.15. The outlook looks so strong, that any current price discount is just an opportunity to add more to investors' stake in Merck. Merck is surely a top pick, even though not a buy for immediate use, better to postpone for a week or so until the dust settles.
Disclaimer:
The comments, insights, and reviews posted in this section are solely the opinions and perspectives of authors and do not represent the views or endorsements of RHC Investments or its administrators, except if explicitly indicated. RHC Investments provides a platform for users to share their thoughts on financial market news, investing strategies, and related topics. However, we do not guarantee the accuracy, completeness, or reliability of any user-generated content.
Investment Risks and Advice:
Please be aware that all investment decisions involve risks, and the information shared on metadoro.com should not be considered as financial advice. Always conduct thorough research, seek professional advice, and exercise caution when making investment decisions.
Moderation and Monitoring:
While we strive to maintain a respectful and informative environment, we cannot endorse or verify the accuracy of all user-generated content. We reserve the right to moderate, edit, or remove any comments or posts that violate our community guidelines, infringe on intellectual property rights, or contain harmful content.
Content Ownership:
By submitting content to metadoro.com, users grant RHC Investments a non-exclusive, royalty-free license to use, display, and distribute the content. Users are responsible for ensuring they have the necessary rights to share the content they post.
Community Guidelines:
To maintain a positive and respectful community, users are expected to adhere to the community guidelines of Metadoro. Any content that is misleading, offensive, or violates applicable laws and regulations will be subject to moderation or removal.
Changes to Disclaimer:
We reserve the right to update, modify, or amend this disclaimer at any time. Users are encouraged to review this disclaimer periodically to stay informed about any changes.