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What Analysts Recommend for Merck and AstraZeneca in June

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Better pick

Merck & Co. (MRK) is up 8.49%, and AstraZeneca (AZN) is up 5.08% in 2019 on a year-to-date basis. Merck continues to ride on the success of its leading immuno-oncology drug, Keytruda. AstraZeneca’s oncology drugs Tagrisso and Lynparza have emerged as key revenue drivers for it in 2019. To evaluate which of the two is a better pick in the long run, let’s evaluate the various pros and cons of both companies.

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Analysts’ recommendations and target prices

The consensus recommendation for both Merck and AstraZeneca is a “buy.”

Wall Street analysts expect an upside potential of 7.27% for Merck based on the stock’s closing price on June 13. Analysts have gradually increased the stock’s 12-month consensus target price from $85.52 in March to $87.36 in April to $88.07 in May and then to $88.93 in June. The highest and lowest target estimates for the stock are $100 and $84, respectively.

Of the 17 analysts covering Merck, six have given it “strong buys,” nine have given it “buys,” and two have given it “holds.”

Wall Street analysts expect an upside potential of 13.00% for AstraZeneca based on the stock’s closing price on June 13. Analysts first increased the company’s 12-month consensus target price from $45.77 in March to $46.10 in April to $46.58 in May and then reduced it to $45.10 in June. The highest and lowest target estimates for the stock are $48 and $40, respectively.

Of the five analysts covering AstraZeneca, three have given it “strong buys,” one has given it a “buy,” and one has given it a “hold.”

Share price movements and valuations

On June 13, Merck closed at $82.90, 0.97% lower than its previous day’s close, 38.63% higher than its 52-week low of $59.80, and 1.63% lower than its 52-week high of $84.27. The company’s market cap is $214.30 billion, and its PE, forward PE, PEG (PE-to-growth), PS (price-to-sales), PB (price-to-book), and PC (price-to-cash) ratios are 26.11x, 15.62x, 2.74x, 4.98x, 7.78x, and 24.36x, respectively.

On June 13, AstraZeneca closed at $39.91, 0.05% lower than its previous day’s close, 16.08% higher than its 52-week low of $34.38, and 7.82% lower than its 52-week high of $43.29. The company’s market cap is $102.87 billion, and its PE, forward PE, PEG, PS, PB, and PC ratios are 42.01x, 18.27x, 2.18x, 4.59x, 9.64x, and 20.75x, respectively.

Compared to Merck, AstraZeneca is trading at higher PE, forward PE, and PB ratios but lower PEG, PS, and PC ratios.

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