Handelsbanken Fonder AB has reduced its stake in Merck & Co., Inc. (NYSE: MRK) by selling 26,136 shares during the third quarter of 2023. According to the fund’s latest filing with the Securities and Exchange Commission (SEC), this decrease amounts to a 1.6% reduction, leaving Handelsbanken with a total of 1,618,290 shares valued at approximately $135.8 million.
Multiple other hedge funds have also adjusted their holdings of Merck. Notably, Darwin Wealth Management LLC increased its position by an impressive 237.4%, acquiring an additional 216 shares to reach a total of 307 shares, now worth about $26,000. Similarly, Kilter Group LLC purchased a new position during the second quarter valued at approximately $27,000. Bare Financial Services Inc. also expanded its stake by 51.9% in the same quarter, now owning 366 shares worth $29,000.
Barnes Dennig Private Wealth Management LLC made significant additions as well, increasing its holdings by 302.3% in the third quarter, resulting in ownership of 354 shares valued at $30,000. Lastly, Evolution Wealth Management Inc. entered the market with a new stake valued at about $31,000.
Overall, hedge funds and institutional investors currently hold 76.07% of Merck’s stock, reflecting a robust interest in the biopharmaceutical company.
Merck’s Financial Performance and Dividend Announcement
Merck & Co., Inc. recently reported its earnings results for the fourth quarter on February 3, 2024. The company posted earnings of $2.04 per share, exceeding analysts’ expectations of $2.01 by $0.03. The firm achieved a return on equity of 44.57% and a net margin of 28.08%, with revenues reaching $16.4 billion, surpassing the projected $16.19 billion. This represents a 5.0% increase in revenue compared to the same quarter last year, during which Merck recorded earnings of $1.72 per share.
Looking ahead, Merck has set its fiscal year 2026 guidance at earnings per share in the range of $5.00 to $5.15. Analysts predict that Merck will post average earnings of $9.01 per share for the current year.
In addition to its strong earnings, Merck announced a quarterly dividend of $0.85 per share, set to be paid on April 7, 2024. Investors on record as of March 16, 2024, will benefit from this dividend, which translates to an annualized payout of $3.40 and a yield of 2.8%. The dividend payout ratio currently stands at 46.70%.
Analyst Ratings and Insider Activity
Recent evaluations from various research firms indicate a positive outlook for Merck. Morgan Stanley raised its price target from $100.00 to $102.00 while maintaining an “equal weight” rating. BMO Capital Markets upgraded the stock from “market perform” to “outperform,” adjusting its target from $82.00 to $130.00. Barclays initiated coverage with an “overweight” rating, setting a target price of $140.00. UBS Group also raised its target to $130.00 with a “buy” rating. Currently, MarketBeat reports that the consensus rating for Merck is “Moderate Buy” with an average target price of $125.88.
In terms of insider trading, Executive Vice President Richard R. Deluca sold 37,685 shares at an average price of $120.92 on February 6, 2024, totaling approximately $4.56 million. Following this transaction, Deluca holds 160,174 shares valued at around $19.37 million. Additionally, EVP Jennifer Zachary sold 121,573 shares on February 9, 2024, at an average price of $119.15, amounting to about $14.49 million.
In total, insiders have sold 320,176 shares worth approximately $38.28 million in the last ninety days, with insiders holding just 0.13% of the stock.
Merck & Co., Inc. continues to be a prominent player in the biopharmaceutical industry, engaged in the development of prescription medicines, vaccines, and animal health products, with a focus on oncology and infectious diseases.
