Deutsche Bank Lowers MRK Target To $43, Reiterates Buy Rating

In preparing its 4Q Preview and 2011 Outlook report, Deutsche Bank has lowered its PT on Merck & Company, Inc.

from $48 to $43, and has reiterated its Buy rating. “While our EPS estimates remain the same, the vorapaxar disappointment had a $2-3 negative impact on our DCF valuation,” Deutsche Bank writes. “Further, the recent decline in the stock, suggests that even a more conservative PT provides ample upside. We are now using a target multiple 11.3 X 2011 EPS est., which equates to $43 per share. “We also expect that Merck could raise its quarterly dividend from $0.38 to $0.40 in the first half of this year. Merck currently trades at 8.9 times our '11 EPS estimate, a 33% discount to the market and in line with the sector. Merck's dividend yield currently stands at a lofty 4.5%.” Merck & Company closed Thursday at $34.05.