Merck Q2 Earnings Preview: Analyst Expectations, Jim Cramer's View, And The Spotlight On Keytruda

Pharmaceutical company Merck & Company MRK reports second quarter financial results before market open Tuesday. After being one of the 15 Dow Jones component stocks that traded higher in the first half of 2023, investors now see the stock down year-to-date.

Here’s a look at the company and what experts are saying ahead of earnings.

Earnings Estimates: Analysts expect Merck to report revenue of $14.387 billion in the second quarter, according to data from Benzinga Pro.

The revenue estimates are lower than the figures of $14.593 billion and $14.487 billion reported in the second quarter of last year and the first quarter of this year, respectively.

Merck has beaten revenue estimates from analysts in seven straight quarters.

Analysts expect the company to post a loss of $2.17 per share in the second quarter, compared to $1.40 in earnings per share year-over-year and $1.40 reported in the first quarter.

The company has beaten earnings per share estimates in each of the last seven straight quarters.

Related Link: Merck Releases Encouraging Data From Two Late Stage Studies For Pneumococcal Conjugate Vaccine

What Analysts And Jim Cramer Are Saying: Merck has seen several analyst updates in the month of July ahead of the second quarter earnings report.

Truist reiterated a Buy rating on shares, while lowering the price target from $118 to $116.

HSBC initiated a Hold rating on shares and issued a price target of $123.

Morgan Stanley reiterated an Equal-Weight rating and a price target of $109.

CNBC host Jim Cramer covered Merck in a recent episode of “Mad Money.” The host recommended holding the stock.

“I think Merck is re-inventing itself and is doing a terrific job,” Cramer said.

Key Items to Watch: All eyes may be on Merck’s bestselling Keytruda cancer immunotherapy ahead of the second quarter financial results.

The company recently announced its Phase 3 KEYNOTE-756 trial met a primary endpoint in the treatment of patients with breast cancer. The trial is the first Phase 3 study with an immunotherapy regimen to post a “statistically significant improvement” in the pCR rate, according to the company.

The company said it will share more detailed results in the future.

Keytruda is approved in the U.S. for two indications of treatment for patients with triple-negative breast cancer. The outcomes of the trial may suggest further applications in the future, paving the way for increased revenue possibilities for Keytruda. The Merck immunotherapy is approved to treat several cancer types.

According to Evaluate Pharma, Keytruda is expected to be the best-selling drug in 2023, passing the COVID-19 vaccine, which topped the list in 2022, and long-standing list topper Humira. The estimate sees Keytruda having annual sales of $20 billion to $25 billion in 2023. Keytruda is also expected to be the biggest gainer by dollars, with over $3 billion in new sales in 2023.

Merck recently reported data from two late-stage studies for its pneumococcal conjugate vaccine as well. If approved, the vaccine would be the first for adults for this targeted treatment.

The company also announced results from a midstage trial for a cancer vaccine targeting melanoma being developed with Moderna Inc MRNA in April. Moderna and Merck are looking to expand their vaccine work into other types of cancer.

These recent trial results could be highlighted by the company during the second quarter results and could show the updated pipeline of drugs and trials from the company.

MRK Price Action: Shares of Merck trade at $106.36 compared to a 52-week range of $84.52 to $119.65. After being up year-to-date for the first six months of 2023, a decline in the share price in July sees Merck shares down 4.2% year-to-date as of the time of writing.

Read Next: Analyst Ratings For Merck