Merck (MRK) Lower After UBS Cuts Their Rating to Neutral

Shares of Merck (NYSE: MRK) are 3.5% lower this morning after UBS downgraded the stock from Buy to Neutral, saying they expect the stock to be range bound over the near-term.

UBS also cut their price target on Merck from $43 per share to $40 per share, which they said is more in-line with peers.

UBS said they expect Merck to remain range-bound as Q2 trends for cervical cancer vaccine Gardasil "don't look encouraging." UBS also said supply issues with other vaccines will also hurt sales. The firm doesn't see improved growth visibility from Merck until at least the end of the year.

While UBS expects Merck to report in-line EPS, they said upside looks remote.

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