Thursday, August 13, 2015

BMO Capital Markets Bumps Merck Target To $70; "Outperform" Rating

Kenilworth saw one major Wall & Broad analyst firm make a material move, north -- in its 12 month price target, this morning.

And the shares are reacting to it, on the NYSE today. $70 is a lofty goal. And we shall -- as ever -- wait to see, here. [Prior background from September 2014 here.] Here's a bit from the street trade press outlets:

. . . ."Although we didn't get the better entry point we were waiting for, we have become more optimistic on Merck's pipeline and believe that the upcoming data readouts should also raise Street expectations and lead to multiple expansion," analyst Alex Arfaei wrote.

Merck's commercial and R&D execution were impressive. The company is expected to have "a good finish" in the back half of the year, Arfaei said, while adding that Merck appeared "on the verge of" five to six years of strong growth, driven by its higher margin specialty franchises, particularly Keytruda and Hep-C. . . .

In the report BMO Capital Markets noted, "After discussions with a number of experts at AAIC, we are more bullish on MK-8931, and now assign ~50% probability of approval in 1Q-2019 with risk-adjusted sales of $4.8B by 2024. We have low expectations for the Anacetrapib REVEAL interim look this year, and estimate 35% probability of success in 2017. . . .

So, a little give and take there, in the finer details -- on Anacetrapib. But as indicated in that last link, that comes as no surprise to us -- so, onward.

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