Drugmaker Merck & Co., Inc. (
) on Tuesday caught an upgrade from analysts at Jefferies &
Co., who cited the company's solid balance sheet and cash flow.
The firm said it boosted its rating on MRK from "Hold" to "Buy"
but lowered its price target to $37, still suggesting a nearly 24%
upside to the stock's Monday closing price of $29.94.
The firm also lowered its EPS estimates slightly through 2012,
but said that "Much like with Pfizer (
) during 2010, we see that many commentators do not apply good
balance sheet and cash flow modelling to their Merck Models. Based
on recent commentary from the company we feel assured that capital
will be deployed to produce significant earnings surprise over our
forecast period. We see the recent weakness as an excellent
opportunity to buy the shares."
Merck shares rose 13 cents, or +0.4%, in premarket trading
The Bottom Line
Shares of Merck (
) have a 5.08% dividend yield, based on last night's closing stock
price of $29.94. The stock has technical support in the $26-$28
price area. If the shares can firm up, we see overhead resistance
around the $32-$35 price levels.
Merck & Co., Inc. (
) is not recommended at this time, holding a Dividend.com DARS™
Rating of 3.4 out of 5 stars.
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, as well as a detailed explanation of
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