MRK - Embedded Expectations Analysis - 2021 04 22
Merck & Co., Inc. (MRK:USA) currently trades below corporate averages relative to UAFRS-based (Uniform) earnings, with an 11.4x Uniform P/E. At these levels, the market has bearish expectations for the firm, and management may have concerns about future revenue growth, business development strategies, and the Organon spin-offSpecifically, management may lack confidence in their ability to meet their strong growth guidance in 2021, execute their clinical and commercial priorities, and sustain revenue growth. In addition, they may be overstating the potential of their internal pipeline, the strategic merits of their Organon spin-off, and the accretive nature of the Animal Health business. Furthermore, they may lack confidence in their ability to execute their business development strategy, drive optimization between company divisions, and mitigate margin pressures. Also, they may be concerned about decreases in Organon EBITDA margins, as well as its ability to focus on R&D strategies and overhead costs
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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