MRK) After Its Annual Report
Merck KGaA (ETR:MRK) last week reported its latest yearly results, which makes it a good time for investors to dive in and see if the business is performing in line with expectations. Merck KGaA reported in line with analyst predictions, delivering revenues of €21b and statutory earnings per share of €6.49, suggesting the business is executing well and in line with its plan. The analysts typically update their forecasts at each earnings report, and we can judge from their estimates whether their view of the company has changed or if there are any new concerns to be aware of. We thought readers would find it interesting to see the analysts latest (statutory) post-earnings forecasts for next year.
Check out our latest analysis for Merck KGaA
After the latest results, the 14 analysts covering Merck KGaA are now predicting revenues of €21.5b in 2024. If met, this would reflect a satisfactory 2.2% improvement in revenue compared to the last 12 months. Per-share earnings are expected to increase 4.1% to €6.76. Before this earnings report, the analysts had been forecasting revenues of €21.5b and earnings per share (EPS) of €6.81 in 2024. The consensus analysts don’t seem to have seen anything in these results that would have changed their view on the business, given there’s been no major change to their estimates.
There were no changes to revenue or earnings estimates or the price target of €179, suggesting that the company has met expectations in its recent result. It could also be instructive to look at the range of analyst estimates, to evaluate how different the outlier opinions are from the mean. There are some variant perceptions on Merck KGaA, with the most bullish analyst valuing it at €200 and the most bearish at €155 per share. Still, with such a tight range of estimates, it suggeststhe analysts have a pretty good idea of what they think the company is worth.
Taking a look at the bigger picture now, one of the ways we can understand these forecasts is to see how they compare to both past performance and industry growth estimates. We would highlight that Merck KGaA’s revenue growth is expected to slow, with the forecast 2.2% annualised growth rate until the end of 2024 being well below the historical 8.6% p.a. growth over the last five years. Compare this against other companies (with analyst forecasts) in the industry, which are in aggregate expected to see revenue growth of 3.2% annually. So it’s pretty clear that, while revenue growth is expected to slow down, the wider industry is also expected to grow faster than Merck KGaA.
The Bottom Line
The most important thing to take away is that there’s been no major change in sentiment, with the analysts reconfirming that the business is performing in line with their previous earnings per share estimates. Fortunately, the analysts also reconfirmed their revenue estimates, suggesting that it’s tracking in line with expectations. Although our data does suggest that Merck KGaA’s revenue is expected to perform worse than the wider industry. There was no real change to the consensus price target, suggesting that the intrinsic value of the business has not undergone any major changes with the latest estimates.
With that said, the long-term trajectory of the company’s earnings is a lot more important than next year. We have forecasts for Merck KGaA going out to 2026, and you can see them free on our platform here.
You can also view our analysis of Merck KGaA’s balance sheet, and whether we think Merck KGaA is carrying too much debt, for free on our platform here.
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This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned.
