MRK - Embedded Expectations Analysis - 2018 09 17
Merck & Co., Inc. (MRK:USA) currently trades below corporate averages relative to UAFRS-based (Uniform) Earnings, with a 15.3x Uniform P/E. At these levels, the market is pricing in bearish expectations for the firm, and management is concerned about the effectiveness of KEYTRUDA, GARDISIL demand, and compressing marginsSpecifically, management may lack confidence in the effectiveness of their KEYTRUDA immunotherapy, and in their ability to promote and sell KEYTRUDA to multiple categories of specialists. Also, they may lack confidence in their ability to maintain high rates of KEYTRUDA treatment among new lung cancer patients. In addition, they may be exaggerating their excitement about the FDA approval of their sBLA for the use of GARDASIL in women and men between the ages of 27 and 45, and the demonstrated protective ability of their investigational V920 vaccine against the Ebola disease. Finally, they may lack confidence in their ability to sustain strong performance in Lynparza and in the sustainability of strong underlying demand for GARDASIL
Merck & Co. is a global health care company that delivers health solutions through its prescription medicines, vaccines, biologic therapies and animal health products. The company's segments are: Pharmaceutical, which includes human health pharmaceutical products that consist of therapeutic and preventive agents for the treatment of human disorders, and human health vaccine products that consist of preventive pediatric, adolescent and adult vaccines; and Animal Health, which discovers, develops, manufactures and markets veterinary pharmaceuticals, vaccines and health management solutions and services, as well as a suite of digitally connected identification, traceability and monitoring products.
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