Shareholders might have noticed that Merck & Co., Inc. (NYSE:MRK) filed its yearly result this time last week. The early response was not positive, with shares down 8.8% to US$89.67 in the past week. Revenues of US$64b were in line with forecasts, although statutory earnings per share (EPS) came in below expectations at US$6.74, missing estimates by 3.8%. Earnings are an important time for investors, as they can track a company's performance, look at what the analysts are forecasting for next year, and see if there's been a change in sentiment towards the company. Readers will be glad to know we've aggregated the latest statutory forecasts to see whether the analysts have changed their mind on Merck after the latest results.

See our latest analysis for Merck

After the latest results, the 22 analysts covering Merck are now predicting revenues of US$66.0b in 2025. If met, this would reflect an okay 2.9% improvement in revenue compared to the last 12 months. Statutory earnings per share are predicted to bounce 23% to US$8.34. In the lead-up to this report, the analysts had been modelling revenues of US$67.5b and earnings per share (EPS) of US$8.79 in 2025. The analysts are less bullish than they were before these results, given the reduced revenue forecasts and the small dip in earnings per share expectations.

The analysts made no major changes to their price target of US$119, suggesting the downgrades are not expected to have a long-term impact on Merck's valuation. That's not the only conclusion we can draw from this data however, as some investors also like to consider the spread in estimates when evaluating analyst price targets. There are some variant perceptions on Merck, with the most bullish analyst valuing it at US$148 and the most bearish at US$95.00 per share. Analysts definitely have varying views on the business, but the spread of estimates is not wide enough in our view to suggest that extreme outcomes could await Merck shareholders.

Looking at the bigger picture now, one of the ways we can make sense of these forecasts is to see how they measure up against both past performance and industry growth estimates. It's pretty clear that there is an expectation that Merck's revenue growth will slow down substantially, with revenues to the end of 2025 expected to display 2.9% growth on an annualised basis. This is compared to a historical growth rate of 9.8% over the past five years. By way of comparison, the other companies in this industry with analyst coverage are forecast to grow their revenue at 9.2% per year. Factoring in the forecast slowdown in growth, it seems obvious that Merck is also expected to grow slower than other industry participants.

The Bottom Line

The biggest concern is that the analysts reduced their earnings per share estimates, suggesting business headwinds could lay ahead for Merck. On the negative side, they also downgraded their revenue estimates, and forecasts imply they will perform worse than the wider industry. The consensus price target held steady at US$119, with the latest estimates not enough to have an impact on their price targets.

With that said, the long-term trajectory of the company's earnings is a lot more important than next year. At Simply Wall St, we have a full range of analyst estimates for Merck going out to 2027, and you can see them free on our platform here..

Don't forget that there may still be risks. For instance, we've identified 1 warning sign for Merck that you should be aware of.

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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.