Merck KGaA (ETR:MRK) Just Released Its Full-Year Earnings: Here's What Analysts Think

As you might know, Merck KGaA (ETR:MRK) recently reported its annual numbers. Revenues of €21b were in line with forecasts, although statutory earnings per share (EPS) came in below expectations at €6.39, missing estimates by 4.1%. 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 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

Following the latest results, Merck KGaA's 15 analysts are now forecasting revenues of €22.1b in 2025. This would be an okay 4.4% improvement in revenue compared to the last 12 months. Statutory earnings per share are predicted to bounce 21% to €7.73. Before this earnings report, the analysts had been forecasting revenues of €22.2b and earnings per share (EPS) of €7.72 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 €180. There's another way to think about price targets though, and that's to look at the range of price targets put forward by analysts, because a wide range of estimates could suggest a diverse view on possible outcomes for the business. Currently, the most bullish analyst values Merck KGaA at €206 per share, while the most bearish prices it at €160. The narrow spread of estimates could suggest that the business' future is relatively easy to value, or thatthe analysts have a strong view on its prospects.

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 KGaA's revenue growth will slow down substantially, with revenues to the end of 2025 expected to display 4.4% growth on an annualised basis. This is compared to a historical growth rate of 5.6% over the past five years. Juxtapose this against the other companies in the industry with analyst coverage, which are forecast to grow their revenues (in aggregate) 3.3% per year. Even after the forecast slowdown in growth, it seems obvious that Merck KGaA is also expected to grow faster than the wider industry.

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, they also reconfirmed their revenue numbers, suggesting that it's tracking in line with expectations. Additionally, our data suggests that revenue is expected to grow faster 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 in mind, we wouldn't be too quick to come to a conclusion on Merck KGaA. Long-term earnings power is much more important than next year's profits. We have forecasts for Merck KGaA going out to 2027, 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.