Will Q1 Earnings Send MRK Stock Lower?
CHONGQING, CHINA - APRIL 20: In this photo illustration, the Merck logo is displayed on a smartphone ... More screen, with the company's green-themed branding visible in the background, on April 20, 2025, in Chongqing, China. (Photo by)
Merck is scheduled to release its earnings report on Thursday, April 24, 2025. Historical data suggests that MRK stock often reacts negatively to such announcements. Over the past five years, the stock has recorded a negative one-day return in 65% of cases, with a median decline of -2.4% and a maximum drop of -9.8%.
While the actual market reaction will depend on how Merck's results compare to consensus estimates and investor expectations, understanding these historical patterns could offer an edge for event-driven traders. Two potential strategies emerge: first, traders can assess the probability of a negative reaction based on historical odds and position themselves before the earnings release. Second, they can analyze the relationship between immediate and medium-term returns post-announcement and adjust their positions accordingly.
Current consensus estimates anticipate earnings per share of $2.14 on revenues of $15.31 billion. This compares to last year's earnings of $2.07 per share on sales of $15.78 billion. While Merck's newer drugs, Winrevair and Capvaxive, are expected to continue gaining market share, sales of Gardasil are projected to decline due to ongoing drops in China. Additionally, increased competition will likely pressure Januvia and Janumet sales. Although Keytruda remains the main growth driver, overall revenues are expected to decline in the first quarter.
That said, for upside with lower volatility than a single stock, the Trefis High-Quality portfolio offers an alternative, having outperformed the S&P 500 with returns exceeding 91% since inception.
See the earnings reaction history for all stocks
Key observations on one-day (1D) post-earnings returns:
Additional data for observed 5-day (5D) and 21-day (21D) returns post-earnings are summarized along with statistical details in the table below.
MRK 1D, 5D, and 21D Post-Earnings Return
A lower-risk approach (assuming the correlation is strong) is to identify the relationship between short-term and medium-term post-earnings returns and trade accordingly. For instance, if the correlation between 1D and 5D returns is highest, a trader could go 'long' for five days when the 1D post-earnings return is positive. Below is the correlation data based on both five-year and three-year histories. Note that '1D_5D' represents the correlation between one-day post-earnings returns and subsequent five-day returns.
MRK Correlation Between 1D, 5D and 21D Historical Returns
Occasionally, peer performance can influence a stock's post-earnings reaction, and the market may start pricing this in before the announcement. The following historical data compares Merck's one-day post-earnings returns with those of peers that reported immediately before Merck. For fairness, peer returns shown are also one-day (1D) post-earnings returns.
MRK Correlation With Peer Earnings
Learn more about the Trefis RV strategy, which has outperformed its all-cap stocks benchmark—a blend of the S&P 500, S&P mid-cap, and Russell 2000—to deliver strong returns. And if you prefer an upside with less volatility than a single stock like Merck, consider the High Quality portfolio, which has outperformed the S&P with returns exceeding 91% since inception.
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