Merck (MRK) Stock Gains Today on Share Repurchase

NEW YORK (TheStreet) -- Merck (MRK) - Get Report shares are up 0.61% to $58.99 in early market trading on Wednesday after the international biopharmaceutical company increased its share buyback program to $10 billion after the closing bell yesterday.

The company's total outstanding share repurchase authorization now stands at $11.7 billion after adding $10 billion to the remaining $1.7 billion left on the company's previous authorization.

The announcement was made on the same day the stock rose during intraday trading yesterday after the company halted testing on its advanced melanoma treatment, Keytruda, after an independent committee concluded that the drug met its two primary endpoints of progression-free survival and overall survival.

The company is expected to seek regulatory approval for the drug by mid-year.

While praising the company's commitment to shareholder's, Trifecta Stocks' Bryan Ashenburg and Bob Lang are more focused on the anticipated products in the company's pipeline.

Yesterday after the market close, model portfolio holding Merck, which earlier in the day announced positive news with its data on cancer drug Keytruda, kept the positive news train rolling as it announced an additional $10 billion stock repurchase authorization. With the announcement, the company is now authorized to buy back a total of $11.7 billion in stock.

We continue to be focused on the upcoming pipeline data that is expected over the next few months, beginning with its hepatitis C combo data expected at the European Association for the Study of the Liver (EASL) conference in late April. We remain bullish on the shares.

Merck is a core holding of Jim Cramer'sAction Alerts PLUS Charitable Trust Portfolio and you can learn more about Cramer's thoughts on the stock, here.

TheStreet Ratings team rates MERCK & CO as a Buy with a ratings score of B+. TheStreet Ratings Team has this to say about their recommendation:

"We rate MERCK & CO (MRK) a BUY. This is driven by multiple strengths, which we believe should have a greater impact than any weaknesses, and should give investors a better performance opportunity than most stocks we cover. The company's strengths can be seen in multiple areas, such as its compelling growth in net income, largely solid financial position with reasonable debt levels by most measures, notable return on equity, attractive valuation levels and expanding profit margins. We feel these strengths outweigh the fact that the company shows weak operating cash flow."

Highlights from the analysis by TheStreet Ratings Team goes as follows:

• The net income growth from the same quarter one year ago has significantly exceeded that of the S&P 500 and the Pharmaceuticals industry. The net income increased by 836.7% when compared to the same quarter one year prior, rising from $781.00 million to $7,316.00 million.
• The current debt-to-equity ratio, 0.44, is low and is below the industry average, implying that there has been successful management of debt levels. Along with the favorable debt-to-equity ratio, the company maintains an adequate quick ratio of 1.19, which illustrates the ability to avoid short-term cash problems.
• The company's current return on equity greatly increased when compared to its ROE from the same quarter one year prior. This is a signal of significant strength within the corporation. In comparison to the other companies in the Pharmaceuticals industry and the overall market, MERCK & CO's return on equity significantly exceeds that of the industry average and is above that of the S&P 500.
• The gross profit margin for MERCK & CO is currently very high, coming in at 78.22%. It has increased from the same quarter the previous year. Along with this, the net profit margin of 69.79% significantly outperformed against the industry average.
• You can view the full analysis from the report here: MRK Ratings Report

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