2. Merck & Co. (NYSE:MRK)
Number of Hedge Fund Holders: 96
Forward P/E Ratio as of October 7: 13.51
TTM Net Income: $13.73 Billion
5-Year Net Income CAGR: 7.97%
Merck & Co. (NYSE:MRK) is a multinational pharmaceutical company that has been a leader in the industry for over 125 years. The company focuses on delivering innovative, life-changing medicines and vaccines, and has established itself as one of the world’s largest and most successful pharmaceutical companies.
In Q2, Merck & Co.’s (NYSE:MRK) revenue increased to $16.11 billion, up 7.1% year-over-year, and its earnings per share (EPS) was $2.28, up 10.1% quarter-over-quarter. The strong results were driven by the company’s pharmaceutical segment, which accounts for 89.4% of its revenue. The segment’s total sales were $14.41 billion, up 7.1% year-over-year.
Merck & Co.’s (NYSE:MRK) oncology portfolio was a major contributor to its success, with sales of $8.05 billion, up 16.4% year-over-year. Keytruda, the company’s PD-1 inhibitor, was a significant driver of this growth, with sales of $7.27 billion, up 15.9% year-over-year. The medication has been approved for 40 indications in the US and is expected to continue to drive growth for the company.
Merck & Co.’s (NYSE:MRK) vaccine franchise also performed well, with sales of $3.51 billion, up 7.6% year-over-year. The company’s Gardasil and Gardasil 9 vaccines, which protect against human papillomavirus, were major contributors to this growth, with sales of $2.48 billion, up 10.2% quarter-over-quarter. The company’s cardiovascular franchise also saw significant growth, with sales of $248 million, up 86.5% year-over-year, driven by the FDA’s approval of Winrevair for the treatment of pulmonary arterial hypertension.
Merck & Co.’s (NYSE:MRK) Winrevair is the first and only activin signaling inhibitor therapy approved for Pulmonary Arterial Hypertension (PAH), a serious and debilitating condition that affects millions of people worldwide, in all 27 member states of the European Union, as well as Iceland, Liechtenstein, and Norway. Winrevair is expected to continue to drive growth for the company.
Merck & Co. (NYSE:MRK) is also progress in developing its pipeline of vaccines and experimental drugs, including the publication of encouraging data from a Phase 3 clinical trial evaluating the efficacy of Clesrovimab in protecting infants against respiratory syncytial virus disease, which will also drive growth for the company.
Merck & Co.’s (NYSE:MRK) forward P/E ratio of 13.51indicates a 36.97% discount compared to the sector median of 21.44, the company’s net income for the twelve months ending June 30, was $13.73 billion, a staggering 341.53% increase year-over-year and a 5-Year net income compound annual growth rate (CAGR) of 9.97%. Analysts forecast the company’s earnings will increase by 136.62% this year and are extremely bullish on the company’s stock price, with a consensus Buy rating at a target price of $139.86, which implies a 24.10% increase from its current levels.
