There's A Pulse in Merck
Merck’s (MRK) product pipeline is embedding low
expectations, and several unfolding catalysts could trigger upside
revisions over the coming quarters. The stock is trading at a
reasonable valuation relative to its peers and investors can get
paid to wait given its dividend yield of 4.3%.
Merck is a beneficiary of low pipeline expectations. In contrast to
Eli Lilly and Bristol Myers who have made recent major
announcements, Merck has been sailing under the radar. Merck's major
franchises and/or pipeline drugs are Januvia franchise, Tredaptive
franchise, Vytorin/Zetia franchise, suvorexant, odanacatib and
anacetrapib. By some estimates, these have a combined sales
potential of over $20 Bn in 2015 at almost guaranteed success. This
leaves Merck currently undervalued relative to its peers but with
quiet upside. Furthermore, Merck recently recorded a patent victory
for Vytorin/Zetia ensuring a steady income from the franchise
between in the next three years.
