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Opinions David Baskin
Merck & CompanyMRKDON'T BUYSep 24, 2015
David BaskinStock price when the opinion was issued
As of Jun 18, 2026. Market Open.
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He owns ELI and AZN instead. MRK's key drug, Keytruda, is an anti-cancer treatment which drove their sales up 21% last year, and amounts to nearly 30% for their sales, but the patent cliff will happen in 2028. So, MRK must replace those sales (drug pipeline or buy a company). Be cautious here.
Portfolio of cancer-fighting stars. Great portfolio and great pipeline. Low valuation of 12x earnings. AAA balance sheet, good future. Good times ahead. Yield is 3%.
(Analysts’ price target is $124.26)
Gordon Reid
Upgraded today and he agrees. His #1 healthcare pick this year. A key drug will come off patent in 2028, but they have tons of drugs to replace it. They beat and bottom lines.
Kevin SimpsonHad great success during the pandemic; their vaccine led. The company just offered growth warnings. He prefers Merck for its better valuation and their key drug Keytruda which makes up 35% of their revenue.
Gordon ReidBenefitted from Covid vaccines. Patent expirations in a couple of years. How will they continue to grow? Company is confident in acquisitions and internal R&D. She's looking at it, no decision yet. Cheap multiple, attractive yield. More of a deep value play.
MRK's done relatively better. Drugs going off patent also, but pipeline is a bit better. She's looking at this one too, still assessing.
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Premium contentThough shares have jumped in the past month, Merck could be entering a new breakout phase. Stability comes from its low 0.34 beta, strong cash flow and growing earnings. It has beaten its last four quarters. It pays a 2.65% dividend. However, its current PE of 90x is far from its five-year norm of 27.53x as well as its competitors Amgen, Eli Lilly and even Moderna. Clearly, the market is pinning high hopes on this name to trade at this valuation.
She's overweight the healthcare sector as a whole, to withstand both volatility and a potential recession. Diverse portfolio. Earnings have climbed for years. Gained over 20% in August alone, so could be start of an uptrend. Better-than-expected earnings and sales. Increased guidance. Yield is 2.65%.
(Analysts’ price target is $123.11)
Brianne GardnerHis homework shows that MRK is an excellent opportunity on pipeline, future growth, earnings, and cashflow.
Gordon Reid
Excellent company with strong R & D capability.
Trading at good price for long term investors.
AAA balance sheet.
Strong dividend yield with excellent coverage (retained earnings more than 50%).
Gordon ReidOnce consumer division gets spun out, JNJ will look more like MRK as a pure pharma play. He owns MRK, and it's performed defensively well, with a strong portfolio. JNJ is more diversified, but MRK is a better company.
Zachary Curry Still owns share in company
Very strong pandemic performance.
Excellent margins in healthcare business.
Very bright outlook for business.
Demand for healthcare products not slowing down.
Expecting new pharma products in the R&D pipeline.
Lots of outstanding patents that protects business model.
Gordon Reid
He has always been slightly cautious of the patent protected pharma industry. Drugs are very expensive to create, then eventually they come off patent and also there is always the risk of litigation. He prefers TEVA-N, who changed a drug to be several times ago and were able to extend their patent.