UPDATE: Bank of America Upgrades Merck to Buy; Pullback Creates Meaningful Upside Potential

Bank of America upgraded Merck (NYSE: MRK) from Neutral to Buy and maintained a $47.00 price objective.

Bank of America commented, "With the stock having performed poorly since last Fall and lagging the group yearto-date, we now see enough total return potential over the next year to justify a Buy rating (our DCF-derived PO of $47 is unchanged). The recent stock pullback and below average P/E multiple is likely driven by investor concern ahead of the IMPROVE-IT. … [W]e see a worst case as unlikely, and we still see odanacatib as a “when” not an “if” in terms of approvability. In the meantime, we like MRK's above-average dividend (4.0% yield) and expect some important pipeline updates this year."

Merck closed at $42.63 on Friday.

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