Although Merck (NYSE: MRK) does not officially announce their 1Q 2007 results until April 19, they let the cat out of a bag a little bit today at around 6:30pm. In short, MRK expects better than expected 1Q 2007 results and is raising their EPS guidance for 2007 by about 5% when compared to their original projections. See article at Yahoo! Finance.
MRK was up big-time on the news - up over 3.5% to $48 in after hours trading. I believe we will also see some upgrades on MRK in the coming days, likely to sector outperform or overweight. Apart from their 3.3% dividend yield, which is very nice for a company showing the growth and results they are having, the cards are stacking up nicely for MRK to perhaps reach their all-time high levels of $90+ per share in the coming 3-4 years.
I know it is typically buy on rumor, sell on news, but this might be a little different considering their blow out guidance is well above what anyone expected. I do expect a strong Friday, and likely some profit taking over the next couple of days, but reaching $50 per share is very likely in the coming weeks.
MRK has solid financials and a great drug pipeline, developed both through internal R&D and strategic acquisitions. I am not a huge MRK advocate, as everyone knows about it, but this is a great retirement investment. Even with the recent climb in price, the market is open 9:30am-4:00pm, Monday-Friday - any time within that framework is a good time to buy if you have a 10+ year time horizon.
Also, to continue gloating about the 'expert' saying PFE is a better pick than MRK, well, it's now Terence 2, Experts 0.
FYI, I own PFE as well for myself and my daugthers via their DSPP - same as in MRK - and I believe that PFE will do well in the long term and continue to raise their annual dividend. MRK's success should also spillover some into the PFE realm. PFE was up 1.6% today and up another 0.5% after hours on the MRK news.
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