Merck Still a "Hold" at Jefferies; Pipeline Risks Persist (MRK)

Merck Still a “Hold” at Jefferies; Pipeline Risks Persist (MRK)


Drug maker Merck & Co., Inc. (MRK) on Monday received some mixed commentary from analysts at Jefferies & Co.

The firm maintained its “Hold” rating on MRK but lifted its price target from $42 to $44. That new target suggests zero upside to the stock’s Friday closing price of $44.57.

A Jefferies analyst commented, “Merck delivered a good set of numbers in Q2’12 with another strong performance from the Januvia franchise. Management refrained from raising 2012 guidance pointing to the LOE for US Singulair as well as increasing FX headwinds in H2’12. We see the shares as being fairly valued at present with some downside risk tied to the pipeline as Tredaptive (on efficacy) and odanacatib (on safety) could disappoint against market expectations.”

Jefferies lifted its 2012 earnings estimates for the company slightly, but also cut its 2013 estimates by a penny.

Merck shares were mostly flat in Monday morning trading.

The Bottom Line
Shares of Merck (MRK) have a 3.77% dividend yield, based on Friday’s closing stock price of $44.57. The stock has technical support in the $41-$42 price area. If the shares can firm up, we see overhead resistance around the $47-$48 price levels.

Merck & Co., Inc. (MRK) is not recommended at this time, holding a DARS™ Rating of 3.4 out of 5 stars.

Be sure to visit our complete recommended list of the Best Dividend Stocks, as well as a detailed explanation of our ratings system here.

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