It's been a good week for Merck & Co., Inc. (NYSE:MRK) shareholders, because the company has just released its latest annual results, and the shares gained 3.3% to US$90.58. It looks like the results were a bit of a negative overall. While revenues of US$64b were in line with analyst predictions, statutory earnings were less than expected, missing estimates by 3.8% to hit US$6.74 per share. Following the result, the analysts have updated their earnings model, and it would be good to know whether they think there's been a strong change in the company's prospects, or if it's business as usual. We've gathered the most recent statutory forecasts to see whether the analysts have changed their earnings models, following these results.

See our latest analysis for Merck

Taking into account the latest results, Merck's 23 analysts currently expect revenues in 2025 to be US$65.3b, approximately in line with the last 12 months. Per-share earnings are expected to leap 23% to US$8.31. Yet prior to the latest earnings, the analysts had been anticipated revenues of US$65.4b and earnings per share (EPS) of US$8.34 in 2025. So it's pretty clear that, although the analysts have updated their estimates, there's been no major change in expectations for the business following the latest results.

It will come as no surprise then, to learn that the consensus price target is largely unchanged at US$114. 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. The most optimistic Merck analyst has a price target of US$146 per share, while the most pessimistic values it at US$95.00. There are definitely some different views on the stock, but the range of estimates is not wide enough as to imply that the situation is unforecastable, in our view.

One way to get more context on these forecasts is to look at how they compare to both past performance, and how other companies in the same industry are performing. 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 1.8% growth on an annualised basis. This is compared to a historical growth rate of 9.8% over the past five years. Compare this against other companies (with analyst forecasts) in the industry, which are in aggregate expected to see revenue growth of 8.6% annually. 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 most obvious conclusion is that there's been no major change in the business' prospects in recent times, with the analysts holding their earnings forecasts steady, in line with previous 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'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.

Following on from that line of thought, we think that the long-term prospects of the business are much more relevant than next year's earnings. 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..

Plus, you should also learn about the 1 warning sign we've spotted with Merck .

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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.