MRK
Merck & Co., Inc.
Healthcare
08/17/2020
Presented
| Date | 08/13/2020 |
| Price | $83.54 |
| Market Cap | $211.29B |
| Ent Value | $215.98B |
| P/E Ratio | 20.34x |
| Book Value | $10.93 |
| Div Yield | 2.85% |
| Shares O/S | 2,529.24M |
| Ave Daily Vol | 9,422,591 |
| Short Int | 0.54% |
Current
| Price | $111.53 |
| Market Cap | $282.71B |
| Merck & Co., Inc. engages in the provision of health solutions through its prescription medicines, vaccines, biologic therapies, animal health, and consumer care products. It operates through the following segments: Pharmaceutical, Animal Health, Healthcare Services, and Alliances. The Pharmaceutical segment includes human health pharmaceutical and vaccine products. The Animal Health segment discovers, develops, manufactures, and markets animal health products, such as pharmaceutical and vaccine products, for the prevention, treatment and control of disease in livestock and companion animal species. The Healthcare Services segment offers services and solutions that focus on engagement, health analytics, and clinical services to improve the value of care delivered to patients. The Alliances segment includes results from the company's relationship with AstraZeneca LP related to sales of Nexium and Prilosec. The company was founded in 1891 and is headquartered in Kenilworth, NJ. |
Publicly traded companies mentioned herein: Abbvie Inc (ABBV), Argenx SE (ARGX), AstraZeneca PLC (AZN), Bristol-Myers Squibb CO (BMY), Gilead Inc (GILD), Johnson & Johnson (JNJ), Merck & Co Inc (MRK), Moderna Inc (MRNA), MyoKardia Inc (MYOK), Pfizer Inc (PFE), Regeneron Pharmaceuticals Inc (REGN), Seattle Genetics (SGEN)
Highlights
The presenter is long shares of Merck (MRK), despite acknowledging what appears to have been a “very clear short case” over the past 6-9 months in the company’s dependence on a single product (Keytruda). He is, however, bullish on MRK based on three factors: the possibility of an acquisition in the near term, continued growth of Keytruda’s franchise, and the development of a COVID-19 franchise (vaccine and treatment), all of which could result in the stock re-rating aggressively. MRK shares have been trading in the $70-80 range, and the presenter models upside of $30 over the next few months (PT range of $100-$110).
MRK suffers from revenue concentration (3 products including Keytruda account for ~40% of revenue). With patents on Keytruda set to expire starting in 2026, bears compare it to AbbVie’s Humira. While the presenter agrees that a lack of product portfolio diversification is a potential issue for MRK, the company has time to and can diversify its portfolio away from Keytruda.
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