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How Analysts View Merck Stock, Pre-Q3 Results

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Stock performance

Between October 11 and 12, Merck (MRK) stock rose ~2.11% from $68.37 to close at $69.81. It was 32% higher than its 52-week low of $52.83 on April 3. Merck’s 52-week high is $72.89, reached on October 10.

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Merck’s portfolio

On October 25, Merck (MRK) is set to present its third-quarter and year-to-date sales figures. Merck’s oncology business is driven by Keytruda revenue, which grew ~89% YoY (year-over-year) in Q2 2018 to $1.7 billion. Keytruda’s strong revenue growth is expected to continue in the third quarter.

Merck’s vaccine business is driven by Gardasil sales, which grew ~30% YoY in Q2 2018. Bridion revenue, another driver for Merck, grew ~48% YoY to $240.0 million in the second quarter, and Merck’s animal health revenue grew ~14% YoY to $1.1 billion.

Analysts’ recommendations

Of the 18 analysts tracking Merck, five recommend “strong buy,” ten recommend “buy,” and three recommend “hold.” Their consensus target price of $75.99 implies an ~8.85% return over the next 12 months.

Peers’ ratings

Of the 18 analysts tracking Pfizer (PFE), ~50% recommend “buy,” and of the 20 tracking Johnson & Johnson (JNJ), ~50% recommend “buy.” Of the 20 analysts tracking AbbVie (ABBV), ~45% recommend “buy.” Analysts’ consensus target prices for PFE, JNJ, and ABBV are $42.27, $144.32, and $109.83, respectively, implying ~2.99%, ~7.81%, and ~21.10% returns over the next 12 months.

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