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Is this Large Market Cap Stock target price reasonable for Merck & Co. Inc. (NYSE:MRK)?

The company in question is, Merck & Co. Inc. (NYSE:MRK) currently with a stock price of 58.68 (-0.19% today). The market cap for Merck & Co. Inc. is 162786.57, and is in the sector Healthcare, and Drug Manufacturers – Major industry. The target price for Merck & Co. Inc. is 61.45. Currently Merck & Co. Inc. is trading with a P/E of 35.96, and a forward P/E of 15.62. Average volume for Merck & Co. Inc. is 8840.44 and so far today it is 2149018.

Performance in the last year for Merck & Co. Inc. has been 4.63%. For EPS growth, Merck & Co. Inc. has seen a growth of -61.60%, and is looking to grow in the next year to 1.24%. More long term stats show that EPS growth has been 41.50% over the last five years and could be 5.10% for the next five years. Merck & Co. Inc. has seen sales growth quarter over quarter at -1.20%, with EPS growth quarter over quarter at 20.60%. The 20-day simple moving average is 3.52%, with the 200-day simple moving average coming to 10.57%.

Since the IPO date for Merck & Co. Inc. on the 1/2/1970, Merck & Co. Inc. has seen performance year to date to be 13.19%. With Merck & Co. Inc. trading at 58.68, the dividend yield is 3.13%, and the EPS is 1.64.

So could Merck & Co. Inc., be undervalued? Well as said before P/E is 35.96. The PEG is 7.05, P/S is 4.13 and the P/B is at 3.72. The P/cash is 12.58, with P/free cash flow at 27.97.

Merck & Co. Inc. ability to deal with debt shows that the current ratio is 1.6, and the quick ratio is 1.3. This is with long term debt/equity at 0.54, and total debt/equity at 0.59.

In terms of margins, Merck & Co. Inc. has a gross margin of 62.80%, an operating margin of 18.20% and a profit margin of 11.70%.Payout ratio for Merck & Co. Inc. is 110.40%. Return on assets come to 4.60% with return on investment coming to 6.40%.

Insider ownership for Merck & Co. Inc., is at 0.04% and institutional ownership comes to 74.90%. Outstanding shares are at 2768.95. While shares float is 2766.95. The float short is currently 1.10%, and short ratio is 3.43.

Disclaimer: Remember there is a risk to your investment, this is not a recommendation, nor personal advice, never invest more than you are able too loose.

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Tony Dabbs

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