Merck Projects Lower 2025 Earnings Amid Vaccine Shipment Pause
New York, Tuesday, 4 February 2025.
Merck’s 2025 earnings forecast, at $64.1-$65.6 billion, falls short of analyst expectations due to halted HPV vaccine shipments to China, impacting revenue negatively.
Market Impact and Share Performance
Merck & Co. (NYSE: MRK) has seen its stock decline by 8% [8] following the release of its 2025 guidance, which fell significantly below market expectations. The company’s projected adjusted earnings range of $8.88 to $9.03 per share is notably lower than analysts’ consensus estimate of $9.21 [8]. The pharmaceutical giant’s anticipated sales range of $64.1 billion to $65.6 billion also falls short of the market’s expected $67.36 billion [1][8].
China Market Challenges
A significant factor affecting the outlook is Merck’s decision to suspend HPV vaccine shipments to China [1]. This development comes at a time when the company faces additional headwinds from foreign exchange rates, with a projected 2% negative impact based on mid-January 2025 rates [1]. The China situation has prompted financial institutions to reassess their positions, with Deutsche Bank adjusting Merck’s price target downward from $140 to $132 [1].
Growth Projections and Market Position
Despite current challenges, analysts maintain a generally positive outlook on Merck’s long-term prospects. Of the 28 analysts covering the stock, 19 maintain either a ‘strong buy’ or ‘buy’ recommendation, while 9 hold a ‘hold’ position [6]. The company’s pharmaceutical division, which accounts for 67% of net sales [1], continues to be a core strength. Looking ahead, Merck’s earnings are projected to grow by 20.47% in 2025 [5], suggesting potential resilience despite near-term headwinds.
Future Outlook and Next Milestones
Investors and analysts will be closely monitoring Merck’s performance, with the next earnings announcement scheduled for April 24, 2025 [5]. The company’s track record of meeting or exceeding earnings expectations for at least eight consecutive quarters [6] provides some confidence, despite current challenges. However, the median price target has been reduced to $121.66, down from $130 a month ago [6], reflecting adjusted market expectations in light of recent developments.