Wednesday, November 19, 2014

Jefferies & Co. Price Target For Merck Has "See-Sawed" Between $63 And $60 -- For 18 Months Now

Just yesterday, analysts at Jefferies kept their Neutral or Hold view on Merck, but took the 12 month price target north -- from $60, to $63.

Not even two months ago, in early October of this year, Jefferies dropped its target from $62 to $60 -- perhaps on concerns about the impending IMPROVE-IT results disclosures. Now that IMPROVE-IT is essentially harmless to slightly positive news, it seems, Jefferies is back up at $63. But this is the money quote, from my perspective:

. . . .stock [will remain] range bound. . . .

So expect more see-sawing, in the narrow 12 month target band between $63 and $60, from this truly independent analyst shop. Jefferies seeks no i-banking business from Merck, so it is -- in my view, at least -- truly independent of the endless offers of tens of millions of dollars in fees (for things like M&A advisory, or debt or equity underwriting, for example) Merck might slide its way.

And as we've seen, when Deutsche jumps the couch and hangs a $65 on the name, it gets rewarded -- by dint of dark magic, no less -- with a "left hand" lead, on a huge Merck debt deal -- just a few weeks later. And that means serious, serious fees for scarcely any work.

Not so with Jefferies. And to be clear, I do believe Deutsche has still complied with SEC Reg AC here. It is just a weak regulation, that's all. All the bank has to say is that it actually believes the rating it has assigned. And I'm sure it does.


Anonymous said...



Condor said...

Thank you so much, Anon.! --

On the potential ebola vaccine -- I think it a very laudable thing the majors are attempting, in collaboration.

It is the right thing to do.

And, like other earlier similar campaigns (think the river blindness cure, here), it seems to me that the effort would be unlikely to ever show a profit for the vaccine makers.

So. . . it is a wonderful humanitarian effort -- but the vast numbers of vials needed in Africa (and elsewhere around the globe), times the small price most of Africa can afford to pay per dose, makes this almost certainly a pure humanitarian (money losing) effort.

And I support it fully.

Excellent second link, too! -- on that one, I'll likely write a complete post, later today or tomorrow morning. Off to work out, now!

Namaste -- do stop back!