Merck is the IBD Stock Of The Day after notching a quarterly beat that included $3.2 billion in sales of its Pfizer-rivaling Covid pill. Merck stock is now eyeing a fresh buy point.
The Ridgeback Biotherapeutics-partnered treatment called Lagevrio generated more than one-fifth of Merck's sales during the quarter. It rivals Pfizer's Paxlovid. Overall sales surged by half in the first quarter. Excluding Lagevrio's impact, Merck reported 19% sales growth.
Now, the company expects the Covid pill to bring in $5 billion to $5.5 billion in full-year sales. It also raised its 2022 earnings and sales outlooks.
In response, Merck stock surged 4.9% to close at 88.58 on today's stock market. Shares are forming a cup-with-handle base with a buy point at 89.58, MarketSmith.com shows.
Merck Stock: Strong Quarterly Sales, Profit
During the quarter ended in March, Merck earned $2.14 per share, minus some items, on $15.9 billion in sales. Earnings soared 84% and beat analysts' call for $1.83. Sales were $15.9 billion, up 50% year over year. Merck stock analysts expected $14.56 billion, according to FactSet.
Excluding the impact of exchange rates, earnings and sales popped a respective 89% and 52%.
Importantly, Merck's biggest moneymaker, cancer treatment Keytruda, raked in $4.8 billion. Its sales advanced 23%. Human papillomavirus vaccine Gardasil generated $1.5 billion in sales, up 59%. In constant currency, Keytruda sales rose 27% and Gardasil sales rocketed 60%.
For the year, Merck now expects to earn $7.24-$7.36 per share on $56.9 billion to $58.1 billion in sales. At the midpoints, both metrics are above Merck stock analysts' forecast for adjusted earnings of $7.28 a share on $57.25 billion in sales.
Ratings For Merck
Merck currently holds an IBD Composite Rating of 97 out of a possible 99. Its Earnings Per Share Rating is 90, and its Relative Strength Rating is 87.
The company ranks third behind Pfizer and Bristol Myers Squibb in IBD's Medical-Ethical Drugs group. The group ranks 35th out of 197 industry groups IBD covers.
Early Thursday, Merck stock was added to IBD's SwingTrader. Shares recently broke above their 21-day line.
Follow Allison Gatlin on Twitter at @IBD_AGatlin.
