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Why Merck & Co., Inc. (NYSE: MRK) and AbbVie Inc. (NYSE: ABBV) Earnings Report Could Fuel Buying Spree

Mixed earnings report has dominated the stock market over the past month. While some companies have posted better than expected numbers, some have capitulated on struggling to beat estimates owing to COVID-19 shocks. AbbVie Inc. (NYSE: ABBV) is one of the companies that look set to post better than expected numbers at the back of an impressive third quarter.

Merck Earnings Estimates

Investors also wait to see the kind of numbers that Merck will post, the pharmaceutical company having come under pressure in recent days. The stock has been in consolidation mode in recent months, having lost more than 1.25% over the past month. The stock has also lagged the medical sector gain of 2.44%.

With the upward momentum losing steam, the upcoming next report could have a significant impact on the direction the stock moves. Consensus estimates indicate that the pharmaceutical company could report earnings of $1.35 a share representing a 16% year-over-year growth. Revenues are expected at $12.59 billion up 6% year-over-year.

Earnings beating estimates should go a long way in strengthening Merck sentiments in the market conversely fuel another leg higher, after recent struggles in a tight trading range. AbbVie, on the other hand, looks set to finish the year on a high as it continues to fire on all cylinders.

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AbbVie Earnings Estimates

AbbVie has been on a fine run for the better of the year and currently flirting with record highs. The drug maker has gained more than 3.6% over the past month, outperforming the Medical sector gain of 2.4% and the S&P 500 gain of 3.2%.

Another leg higher could be on the cards as AbbVie reports its earnings for the most recent quarter. The stock’s sentiments could edge higher on the earnings report coming in better than expected. Analysts expect the drug maker to post earnings of $2.85 a share, up 28% from the prior-year quarter. Revenue, on the other hand, is expected to climb 57% to $13.75 billion.

Considering that AbbVie is trading with a P/E ratio of 9.81 compared to the industry average of 13.55, it looks cheap and trading at a discount. Similarly, a solid earnings report could trigger a buying spree.

Ruchi Gupta

Ruchi Gupta covers various beats from finance to technology and from lifestyle to hobbies. She has an MBA in Finance. Ruchi enjoys writing on celebrities and political news. She likes traveling and exploring places.

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