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Merck Gaining Respectability Again?
Posted on 04/18/2007 23:36:58 | Link | Post Comment
by Ryan Barnes
by 24/7 Wall St.
We can see the sweat on their brow, but all in all Merck (MRK) is running a pretty good race these days going into Thursday’s earnings. With the recent pop from news that the Vioxx class action suit is out, MRK shares are back to where they were before the whole blow up happened. Friday’s rather embarrassing news aside, this stock can almost be evaluated on its merits these days.
Today shares are tapping on the $50.00 level, up 15% in just the past month on massively increased guidance. Estimates for the full year have gone from $2.36 - $2.49 in January to $2.75 - $2.85 as of Friday’s “pre-announcement”. Estimates for the 1st quarter were for $0.63, but management said on Friday to expect $0.78, or $0.84 per share excluding charges for restructuring.
That the company could increase earnings in this particular year would be a feat, as the $4.4 billion in annual sales from Zocor was put in the piñata last June when the drug went off patent. Good things are expected from new entry Janumet (a DPP-4 inhibitor for diabetes), which will be first-to-market for a while now that Novartis (NVS) has had its entry put on the shelf indefinitely.
HPV vaccine Gardasil is also gaining a lot of traction, as Merck’s lobbying efforts have paid off and more than two dozen states are considering following in Texas’s footsteps. In the 4th quarter the drug had sales of $155 million, up over 100% sequentially.
The drugs that will be carrying the load in the short-term will still be the cholesterol ventures Zetia (expected to grow about 35%) and Vytorin (expected to grow about 60%).
Based on the new guidance figures, the company is trading at 17.5x earnings. If the “intrinsic cost” of Vioxx litigation continues to drop (they are winning over 75% of cases thus far) and the pipeline holes start to have real contenders to fill them, we could see earnings estimate having further upside from here.
Source: 247WallSt.com
RELATED READING:
- Cervical Cancer Vaccine Wars Heating Up
- Amgen CFO Walks Out; Any More Execs Leaving?
- Someone At Merck Is Crazy
- Merck Does Investors a Favor
______________________
by 24/7 Wall St.
We can see the sweat on their brow, but all in all Merck (MRK) is running a pretty good race these days going into Thursday’s earnings. With the recent pop from news that the Vioxx class action suit is out, MRK shares are back to where they were before the whole blow up happened. Friday’s rather embarrassing news aside, this stock can almost be evaluated on its merits these days.
Today shares are tapping on the $50.00 level, up 15% in just the past month on massively increased guidance. Estimates for the full year have gone from $2.36 - $2.49 in January to $2.75 - $2.85 as of Friday’s “pre-announcement”. Estimates for the 1st quarter were for $0.63, but management said on Friday to expect $0.78, or $0.84 per share excluding charges for restructuring.
That the company could increase earnings in this particular year would be a feat, as the $4.4 billion in annual sales from Zocor was put in the piñata last June when the drug went off patent. Good things are expected from new entry Janumet (a DPP-4 inhibitor for diabetes), which will be first-to-market for a while now that Novartis (NVS) has had its entry put on the shelf indefinitely.
HPV vaccine Gardasil is also gaining a lot of traction, as Merck’s lobbying efforts have paid off and more than two dozen states are considering following in Texas’s footsteps. In the 4th quarter the drug had sales of $155 million, up over 100% sequentially.
The drugs that will be carrying the load in the short-term will still be the cholesterol ventures Zetia (expected to grow about 35%) and Vytorin (expected to grow about 60%).
Based on the new guidance figures, the company is trading at 17.5x earnings. If the “intrinsic cost” of Vioxx litigation continues to drop (they are winning over 75% of cases thus far) and the pipeline holes start to have real contenders to fill them, we could see earnings estimate having further upside from here.
Source: 247WallSt.com
RELATED READING:
- Cervical Cancer Vaccine Wars Heating Up
- Amgen CFO Walks Out; Any More Execs Leaving?
- Someone At Merck Is Crazy
- Merck Does Investors a Favor
______________________
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