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Upcoming Acquisition between Merck and Schering-Plough Appears Healthy
Excerpt from the InvestorGuide.com Stock of the Day on 10/22/2009

Since the beginning of this year, there has been a lot of attention given to drugmaker Merck & Co., ever since the company announced in March that they would be merging with Schering-Plough Corporation (SGP: Charts, News, Offers). The deal has been carefully analyzed, going through all the regular regulatory channels. And as the end of the year approaches, and the final stages of the deal loom just around the corner, the big question is: Are these two companies in good health as they head towards the merger, or could there be larger issues plaguing this arrangement?

Both companies reported earnings this morning, and as usual they have been looked at as an indicator of the companies' health and performance. Merck reported a slight 2% increase in revenue to $6.05 billion, but a whopping jump in net income from $1.09 billion to $3.4 billion. Taking a step back, however, most of the reason for the profit increase was due to the sale of its stake in the Merial animal health venture, which in itself caused a gain of $1.7 billion. Merck experienced mixed results for its various medications, such as an 84% increase in sales for its HIV drug Isentress, but a 22% drop in sales for its osteoporosis drug Fosamax, due to competition from generic competitors. Excluding certain items, earnings per share worked out to 90 cents, up from 80 cents the year before, and beating analysts' estimates of 82 cents. More >


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Merck Buying More Drugs
Excerpt from the InvestorGuide.com Stock of the Day on 3/10/2009

These past few days, Merck and Schering-Plough (SGP: Charts, News, Offers) agreed to an acquisition arrangement where the former would buy out its rival for $41.1 billion. This represents a 34 percent premium from Friday's closing price. Current Schering-Plough shareholders will receive 0.5767 shares, plus an additional $10.50 for every share that they own. While this is mostly a cash-and-stock deal, Merck is taking in $8.5 billion in debt. The result would give Merck a 68 percent interest in the target company. Unlike other M&As in the industry, this agreement was reached quickly and with little strife. It seems both companies wanted this to go through. When all is said and done, however, does this acquistion really make sense? More >

Round 2: More Job Cuts at Merck
Excerpt from the InvestorGuide.com Stock of the Day on 10/22/2008

Merck announced it will cut 7,200 jobs as its quarterly profit plunged 28% due to a hefty restructuring charge and flat sales. The third-largest U.S. drugmaker cited generic competition and falling sales of its cholesterol medicine and cervical cancer vaccine as major contributing factors to its lower earnings. Profit excluding one-time items would have beat analysts' expectations by a cent. Merck has already cut 10,400 jobs since 2005 and just announced another restructuring program that will slash an additional 10% of its current workforce. What caused the second round of massive job cuts in three years? More >

Doubled Earnings has Merck on the Mend
Excerpt from the InvestorGuide.com Stock of the Day on 7/24/2006

New Jersey-based drugmaker Merck & Co.'s earnings more than doubled this quarter, exceeding its sales outlook and prompting a raise in its earnings estimate for the full year. The thriving quarter has been attributed to strong sales of its cholesterol-reducing and asthma medications, but other factors involved in the 2.5% increase in stock value should be highlighted as well. After trouble in the past from the 2004 Vioxx recall and last year's tax issues, Merck's recent gains seem to correlate with the earnings of its partners. In the competitive pharmaceutical industry, has Merck found success by association? More >

Merck Announces Plans to Cut 7,000 Jobs   11/28/2005

Merck still considered a value play even after massive lawsuit   8/24/2005

Merck & Company (MRK) Upgrades

Date
Analyst
Old Rating
New Rating
03/20/2009
Cowen & Co
Neutral
Outperform
03/13/2009
Bernstein
Market Perform
Outperform
10/17/2008
UBS
Neutral
Buy
09/13/2007
Banc of America Sec
Neutral
Buy
08/06/2007
Cowen & Co
Neutral
Outperform
07/12/2007
AG Edwards
Hold
Buy

Merck & Company (MRK) Downgrades

Date
Analyst
Old Rating
New Rating
07/09/2009
Natixis Bleichroeder
Buy
Hold
09/10/2008
Bernstein
Outperform
Market Perform
07/22/2008
Merrill Lynch
Buy
Neutral
07/07/2008
UBS
Buy
Neutral
04/28/2008
First Global
Market Outperform
Market Perform
01/05/2006
Goldman Sachs
Underperform
In-Line

Merck & Company (MRK) New Coverage

Date
Analyst
Rating
11/12/2009
Morgan Stanley
Equalweight
07/18/2008
Citi
Buy
06/25/2008
J.P. Morgan
Overweight
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