Monday, January 24, 2011

One Year Later: Barclays (Again!) Drops Merck Price Target -- Has It Unloaded?

This morning, while maintaining its overweight rating generally, Barclays (recently, an indirect holder of over 5% of all of Merck's outstanding stock) lowered its 12 month price target from $43 back to $41 -- just $1 over where Barclay's target was one year ago.

If it turns out that Barclays has dropped below the 5 percent threshhold, in its next SEC Schedule 13 filing (or in Merck's next proxy, whichever first appears), we ought to all agree that the target was upped, in part, to allow for higher exit prices, for Barclays, as it liquidated some of its outsized Merck position, on the NYSE and through off-exchange blocks.
Thus -- per

. . . .Merck: price target lowered at Barclays to $41 from $43. Products coming out in 2011 and 2012 appear small in revenue upside, Barclays said. Maintain Overweight rating.. . .

To refresh the readership -- here was my full piece on the plainly "conflicted lifting" of the price target, just about one year ago, now:

On January 29, 2010, BlackRock, Inc. as acquiror of various Barlcays Global Investors entities, filed an SEC Schedule 13G, disclosing that the companies held aggregated long positions (as of December 31, 2009) of 5.29 percent of all the New Merck Common Stock outstanding on that date.
. . . .This Amendment to Schedule 13G this "Amendment") is filed by BlackRock, Inc. ("BlackRock"). It amends the most recent Schedule 13G filing, if any, made by BlackRock and the most recent Schedule 13G filing, if any, made by Barclays Global Investors, NA and certain of its affiliates (Barclays Global Investors, NA and such affiliates are collectively referred to as the "BGI Entities") with respect to the subject class of securities of the above-named issuer. As previously announced, on December 1, 2009 BlackRock completed its acquisition of Barclays Global Investors from Barclays Bank PLC. As a result, [substantially all of] the BGI Entities are now included as subsidiaries of BlackRock for purposes of Schedule 13G filings. . . .

Then, as we learned on Tuesday morning, February 9, 2010, Barclays Capital reiterated its "Overweight" rating on Merck, and upped its 12 month target price to $43, from $40:
. . . .Drugmaker Merck & Co., Inc. saw its price target and earnings estimates raised on Tuesday by analysts at Barclays Capital, ahead of its fourth quarter earnings report.

The analyst boosted its price target for MRK, which had closed at $36.59 on Monday, to $43 from $40. Barclays also raised its 2009 and 2010 earnings estimates to $3.26 and $3.48 per share, respectively, while maintaining its “Overweight” rating on the stock. . . .

Interesting -- so, BlackRock crests the 5 percent summit (on assumption of a legacy Barclays stockholding position) -- requiring SEC 13G disclosure -- and Barclays releases a report designed to up the price of those beefed-up holdings.

Merck will report Q4 and full year 2009 numbers, before the market opens next Tuesday, February 16, 2010. We'll see about those newly-upped estimates, right?

Me? I think trailer-truck-loads of salt ought to be distributed -- with any future Barclays price target increases -- related to Merck, no?

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