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Merck Rises 6% on Strong Q3 Results

Merck & Co. (MRK) has delivered better-than-expected Q3 results driven by top-line growth, which was aided by strong performance across Oncology, Vaccines and Animal Health units. Shares of the pharmaceutical and vaccine products developer gained 6.1% on Thursday.

Adjusted earnings jumped 28% year-over-year to $1.75 per share, beating the Street’s estimate of $1.55 per share. Revenues rose 20% to $13.2 billion, ahead of analysts’ expectations of $12.3 billion.

Pharmaceutical segment’s revenue grew 18% to $11.5 billion on the back of higher sales of products like GARDASIL and Lynparza. Also, Animal Health unit witnessed revenue growth of 14% on robust Companion Animals product sales. (See Merck stock chart on TipRanks)

The President and CEO of Merck, Robert M. Davis, said, “We achieved notable clinical milestones in the key areas of oncology and COVID-19, including positive Phase 3 results for molnupiravir… Looking ahead, we remain focused on building more momentum, delivering on our mission of saving and improving lives and continuing to expand our portfolio and pipeline for long-term success and sustainable value creation.”

Based on mid-October 2021 exchange ranges, Merck expects full-year 2021 revenue to be between $47.4 billion and $47.9 billion, up 14% to 15% year-over-year, as compared to its previous guidance of $46.4 billion and $47.4 billion. Further, the company expects to report adjusted EPS in the range of $5.65 per share and $5.70 per share, up from $5.47 per share and $5.57 per share guided previously.

Following the earnings release, Mizuho Securities analyst Mara Goldstein assigned a Buy rating to the stock with a price target of $100. The price target implies 15.5% upside potential.

Goldstein expects molnupiravir to be a commercial opportunity, which could contribute $5 billion to 7 billion from contracted revenue through 2022.

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Overall, the stock has a Moderate Buy consensus rating based on 5 Buys and 4 Holds. The average Merck price target of $93.56 implies 8.1% upside potential.

TipRanks’ Stock Investors tool shows that investors currently have a Very Positive stance on Merck, with 7.6% of investors on Tipranks increasing their exposure to MRK stock over the past 30 days.

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