Mitigated Patent Risks, Strong Pipeline Bode Well for Merck (MRK) - Cramer
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Merck (NYSE: MRK) is trading higher amid an NDA for NOXAFIL (posaconazole) being accepted by the FDA today, as well as Jefferies boosting its price target on the name from $46 to $48 while maintaining a Hold rating.
Stock sage Jim Cramer was also bullish on the name late Tuesday. He noted that the stock is just up 6 percent for 2013 and lags segment peers. Shares are also going for just about 12 times earnings expectations, versus a richer 14 times segment average.
While many big pharma names have suffered under impending "patent cliffs," Cramer said that Merck's exposure to a similar fate is much more mitigated. The company also has a robust pipeline and dividend with 3.8 percent yield.
Merck's animal health unit added $3.4 billion in sales last year, while the company also has a strong presence in diabetes and vaccine operations. The vaccine unit added $5.8 billion in sales for Merck during 2012, Cramer said.
Looking at 2013, Cramer explains that Merck has no fewer than five solid drugs in its pipeline. While none might be a home run for the pharma, he explained that the pipeline with bolster growth over the next few years.
Overall, Cramer thinks Merck should be trading somewhere around $60, versus a closing price of $45.51 yesterday.
Stock sage Jim Cramer was also bullish on the name late Tuesday. He noted that the stock is just up 6 percent for 2013 and lags segment peers. Shares are also going for just about 12 times earnings expectations, versus a richer 14 times segment average.
While many big pharma names have suffered under impending "patent cliffs," Cramer said that Merck's exposure to a similar fate is much more mitigated. The company also has a robust pipeline and dividend with 3.8 percent yield.
Merck's animal health unit added $3.4 billion in sales last year, while the company also has a strong presence in diabetes and vaccine operations. The vaccine unit added $5.8 billion in sales for Merck during 2012, Cramer said.
Looking at 2013, Cramer explains that Merck has no fewer than five solid drugs in its pipeline. While none might be a home run for the pharma, he explained that the pipeline with bolster growth over the next few years.
Overall, Cramer thinks Merck should be trading somewhere around $60, versus a closing price of $45.51 yesterday.
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