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- Merck Is the Next Market Favourite
Merck Is the Next Market Favourite
Among the wide variety of U.S. stocks, which have reported In the second half of the week, the only exception that I am truly prepared to pick up here and now is Merck. This choice is properly based not only on strong fundamentals, but also on the market's reaction, as this pharmaceutical behemoth is valued at nearly $275 billion. As a matter of fact, this value has been achieved on a very bearish broad market environment. When information technology giants, including Google and Meta, topped the list of weekly losers, despite all their quarterly record profit and sales numbers, combined with positive projections for the nearest future, Merck surprised the crowd. For many are called, but few chosen.
For ten months, Merck share price stayed above the $100 major technical support, while making regular attempts to climb by 20%. Now, it is about 5% above that floor level. Moreover, the stock has every chance to repeat its autumn and winter rally to approach the next $140-150 target area, after seasonal sales of molnupiravir, the COVID-19 antiviral pill, suddenly jumped 47% to $640 million in Q3 to crush Wall Street consensus estimates of $120 million. Molnupiravir was considered as the first breakthrough when only few treatment options were available, but later it was somewhat overshadowed by Pfizer's Paxlovid, as the latter drug dominated in the U.S.. The EU regulator recommended to use Paxlovid too. Yet, Merck's anti-COVID drug happened to be a market leader in Japan.
Merck raised its full-year sales forecast to $1.3 billion on the segment. Besides, Merck's cancer immunotherapy Keytruda reached $6.34 billion to bypass analysts' average estimate of $6.22 billion, while Gardasil, its vaccine to prevent cancers caused by the human papillomavirus, generated sales of $2.59 billion, up by 13%. All in all, Merck CEOs expect 2023 sales in the range of $59.7 billion to $60.2 billion, up from their own previous forecast of $58.6 billion to $59.6 billion, following Merck's Q3 sales of $15.96 billion vs consensus of $15.3 billion. The company earned an adjusted profit of $2.13 per share, beating estimates by 18 cents, which I feel as a great cut of cards for the further price growth.
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