Merck (MRK): Good But Not Enough - BMO

BMO Capital analyst, Alex Arfei, reiterated his Market Perform rating on shares of Merck (NYSE: MRK) after the company reported 2Q16 financial results with revenue ~1% above consensus, While EPS of $0.93 was a couple of pennies above consensus.

The analyst said "Overall, it was a good quarter; however, the top- and bottom-line beats were driven by a number of nonrecurring items (e.g., $60-70MM hedging gains and a $115MM patent settlement); thus, we argue that the beat was low quality." and " not enough to change our neutral investment thesis".

No change to the price target of $62 based on the average of DCF ($65) and P/E ($60) using 15-17x 2016-2018 EPS, discounted back.

For an analyst ratings summary and ratings history on Merck click here. For more ratings news on Merck click here.

Shares of Merck closed at $58.66 yesterday.

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