Leerink Partners Raise PT Following Merck's (MRK) Strong Q1 Results

Leerink Partners maintain a Market Perform rating on Merck (NYSE: MRK), and raised the price target to $66.00 (from $62.00), following impressive 1Q results. Their performance is likely tied to PD1 and HCV.

Leerink Partners analyst, Seamus Fernandez, commented on their views towards MRK, saying, "Post MRK's impressive 1Q results, we are increasing our sales and EPS forecasts as well as our valuation to better reflect Januvia/Janumet's improved US sales prospects following the successful conclusion of TECOS (CV outcomes study). Previously, we modeled flat to declining sales as we expected competition from single-pill DPP4/SGLT2 combos from LLY (OP) / BI and AZN (MP) to take significant share. However, in the wake of the FDA panel recommendation to include the heart failure data in AZN's Onglyza label and the differentiated and clean outcome in TECOS we do not expect this to occur. Our gross margin also increases significantly given 1Q strength along with high margin new product launches (Keytruda, HCV dual), and Januvia sales increases. Our DCF-based valuation increases from $62 to $66/shr and see limited downside risk in the next 6-9 mos."

For an analyst ratings summary and ratings history on Merck click here. For more ratings news on Merck click here.

Shares of Merck closed at $60.00 yesterday.

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