Merck Q2 revenue seen rising, deal to weigh on bottom line

Shares in pharma co Merck & Co MRK.N down 1.9% in last session ahead of quarterly report due out before market open on Tuesday.

Wall Street expects MRK, provider of blockbuster immunotherapy cancer treatment Keytruda, to report Q2 adj. loss/shr of $0.27 vs profit/shr of $2.19 in year-ago quarter on rev of $16.36 bln, which would be up ~3.5% from $15.81 bln a year ago - LSEG data.

Results expected to include charge of about $2.35/shr from MRK's completion of its purchase of biotech firm Terns Pharma, announced in March as a $6.7 billion deal, as co looks to bolster its cancer pipeline ahead of patent loss for Keytruda later this decade.

In last eight quarters, MRK's revenue beat the Street seven times, while EPS beat every time.

Stock last traded at $127.76 vs median PT of $137, according to data compiled by LSEG, which shows 32 analyst ratings: eight 'strong buy,' 14 'buy,' 10 'hold.'

YTD shares up ~21% vs ~11% gain for Dow industrials .DJI and ~5% gain for S&P 500 healthcare index .SPXHC.

MRK options imply a 4.9% swing for the shares, in either direction by Friday, according to Trade Alert data; the stock has logged avg. move of 3.6% on the day of results over the last eight qtrs.