Will Merck Stock Rise On Its Upcoming Earnings?

Merck (NYSE:MRK) is scheduled to announce its earnings on Tuesday, July 29, 2025. Historically, MRK stock has shown a tendency for negative one-day returns following earnings announcements. Over the past five years, the stock experienced a decline on the day after earnings in 60% of instances. The median one-day drop was -2.1%, with the largest single-day decline reaching -9.8%.

While the actual results compared to consensus estimates will be crucial, understanding these historical patterns can provide an advantage for event-driven traders. There are two primary approaches to leverage this information:

• Pre-Earnings Positioning: Based on historical probabilities, traders might consider taking a position before the earnings release.
• Post-Earnings Analysis: Alternatively, traders can analyze the correlation between immediate and medium-term returns after the earnings are released to inform their positioning.

Analysts are projecting earnings of $2.03 per share on revenue of $15.87 billion for the upcoming quarter. This represents a slight decline compared to the year-ago quarter’s earnings of $2.28 per share on sales of $16.11 billion. This expected contraction in sales is largely attributed to ongoing challenges for Gardasil in China, despite continued expansion in Keytruda sales. Also, see – Merck’s Keytruda Dependency: A Growth Story With An Expiration Date.

From a fundamental perspective, Merck has a current market capitalization of approximately $212 billion. Over the last twelve months, the company generated $64 billion in revenue, and was operationally profitable with $20 billion in operating profits and a net income of $17 billion.

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Merck’s Historical Odds Of Positive Post-Earnings Return

Some observations on one-day (1D) post-earnings returns:

• There are 20 earnings data points recorded over the last five years, with 8 positive and 12 negative one-day (1D) returns observed. In summary, positive 1D returns were seen about 40% of the time.
• Notably, this percentage increases to 50% if we consider data for the last 3 years instead of 5.
• Median of the 8 positive returns = 1.7%, and median of the 12 negative returns = -2.1%

Additional data for observed 5-Day (5D), and 21-Day (21D) returns post earnings are summarized along with the statistics in the table below.

MRK 1D, 5D, and 21D Post Earnings Return

Correlation Between 1D, 5D, and 21D Historical Returns

A relatively less risky strategy (though not useful if the correlation is low) is to understand the correlation between short-term and medium-term returns post earnings, find a pair that has the highest correlation, and execute the appropriate trade. For example, if 1D and 5D show the highest correlation, a trader can position themselves “long” for the next 5 days if 1D post-earnings return is positive. Here is some correlation data based on 5-year and 3-year (more recent) history. Note that the correlation 1D_5D refers to the correlation between 1D post-earnings returns and subsequent 5D returns.

MRK Correlation Between 1D, 5D and 21D Historical Returns

Is There Any Correlation With Peer Earnings?

Sometimes, peer performance can have influence on post-earnings stock reaction. In fact, the pricing-in might begin before the earnings are announced. Here is some historical data on the past post-earnings performance of Merck stock compared with the stock performance of peers that reported earnings just before Merck. For fair comparison, peer stock returns also represent post-earnings one-day (1D) returns.

MRK Correlation With Peer Earnings

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