Checking in with Merck Stock Before Earnings

The drug stock hit a record high on Jan. 6 but has since pulled back

Deputy Editor
Jan 31, 2023 at 3:03 PM
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Pharmaceutical company Merck & Co (NYSE:MRK) is one of the many big names set to announce its quarterly report this week, with earnings scheduled before the open on Thursday, Feb. 2. Wall Street anticipates profits of $1.54 per share, and UBS today raised its price target by $3 to $108 ahead of the event. 

A look at its post-earnings history shows Merck stock finishing just three of its last eight next-day sessions higher, including a 1.4% pop after its most recent report. Over the past two years, the Dow member has averaged a 3.2% swing, regardless of direction. This time around, the options pits are pricing in a slightly wider 3.9% move. 

On the charts, Merck stock has been slipping since its Jan. 6 record high of $115.49, though there's support in place at its 100-day moving average. Year-to-date, the shares are down 4%, but still sport a 30.7% year-over-year lead.

MRK Jan31

Put traders are growing bolder, per MRK's Schaeffer's put/call open interest ratio (SOIR) of 0.89, which sits in the 84th percentile of its annual range. In other words, speculative players are more put-heavy than usual among options set to expire in three months or less.

 

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