Merck & Co. Inc. (MRK) shares are trading at lower $81.45 and the avg recommendation for the stock is Moderate Buy, while the current analyst price target stands at $95.58.
To add more color to this target, the company’s high over the last year is $92.64 and the low is $65.25. Over the last 52 weeks, MRK is down -8.14% while the S&P 500 is up 17.73%. The catalyst for this interesting swing was the company’s recent earnings report.
A Notable Earnings Report
In the last quarter, MRK reported a profit of $9.07 billion. Merck & Co. Inc. also saw revenues increase to $12.55 billion. In addition, MRK has free cash flow of $3.08 billion as of 09-2020. The company’s EBITDA came in at $4.08 billion which compares well with its peers.
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MRK booked profit margins of 24.30%, its Return on Equity (ROE) is 42.30%, and its Return on Assets is 13.20%. All told, it is clear that, MRK needs to be on your watchlist.
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Of course, we must look beyond the financials and question how well those numbers represent the sustainable earnings power of the business. Investors need to know how sustainable this current run. MRK has a short ratio of 1.58 and outstanding shares of 2.53B.
MRK has seen increased volume after this news and investors are putting their support behind the value proposition. Furthermore, 10-day volume stands at 8.97 million and more growth is possible in the weeks ahead. Traders will also note the company’s earnings per share came in at 4.55. Merck & Co. Inc. MRK also noted assets of $89.8 billion at the end of the last quarter. Investors should also keep an eye on sector updates as MRK has historically followed its peers on positive news.
All told, Merck & Co. Inc. MRK has strung together solid data and demonstrated underlying fundamentals. At its current valuation, MRK represents an interesting risk/reward case. Traders should stay tuned to see if this recent report will push the stock to test recent resistance levels.
Merck & Co. Inc. MRK is now commanding a market cap of 206.59B and a float of 2.53B. MRK is increasing its credibility in this sector and that could lead to more upside down the line. Sign-up for continuing coverage on shares of MRK stock, as well as other hot stock picks, get our free newsletter today and get our next breakout pick!
Disclosure: we hold no position in MRK, either long or short, and we have not been compensated for this article.