What Do Analysts Think About Merck Limited's (NSE:MERCK) Growth?

The most recent earnings release Merck Limited's (NSEI:MERCK) announced in December 2017 confirmed that the business gained from a robust tailwind, eventuating to a double-digit earnings growth of 23.74%. Below, I've laid out key numbers on how market analysts predict Merck's earnings growth trajectory over the next couple of years and whether the future looks even brighter than the past. I will be using net income excluding extraordinary items in order to exclude one-off volatility which I am not interested in. View our latest analysis for Merck

Analysts' outlook for the coming year seems buoyant, with earnings increasing by a robust 21.97%. This growth seems to continue into the following year with rates arriving at double digit 41.64% compared to today’s earnings, and finally hitting ₹1.44B by 2021.

Even though it is helpful to be aware of the rate of growth each year relative to today’s figure, it may be more beneficial to determine the rate at which the business is moving every year, on average. The pro of this approach is that we can get a bigger picture of the direction of Merck's earnings trajectory over the long run, irrespective of near term fluctuations, which may be more relevant for long term investors. To compute this rate, I put a line of best fit through the forecasted earnings by market analysts. The slope of this line is the rate of earnings growth, which in this case is 14.19%. This means, we can expect Merck will grow its earnings by 14.19% every year for the next few years.

Next Steps:

For Merck, there are three relevant factors you should further research:

1. Financial Health: Does it have a healthy balance sheet? Take a look at our free balance sheet analysis with six simple checks on key factors like leverage and risk.
2. Valuation: What is MERCK worth today? Is the stock undervalued, even when its growth outlook is factored into its intrinsic value? The intrinsic value infographic in our free research report helps visualize whether MERCK is currently mispriced by the market.
3. Other High-Growth Alternatives: Are there other high-growth stocks you could be holding instead of MERCK? Explore our interactive list of stocks with large growth potential to get an idea of what else is out there you may be missing!

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Simply Wall St analyst Simply Wall St and Simply Wall St have no position in any of the companies mentioned. This article 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.