Merck Message Board - Msg: 6769048

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Biotech / Medical : Merck

MRK 113.41

+2.8%

3:59 PM EST

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To: Sonki who wrote (1094)	12/10/1998 7:41:00 AM
From: Rob L.	Read Replies (2) of 1580

Sonki, I think your expectations are too high. At 180 and $4.95 earnings you are expecting merck's PE to rise even further to around 36. How can a company growing at only 14% a year (which by the way is very good for a company of Merck's size) justify a PE of 32-36. I realize Merck has been this expensive for some time now, but I am a bit confused over why it is garnering such a rich valuation. Please don't misinterpret my concerns, Merck is a top notch company doing everything right IMO. However, the growth that the current price indicates just isn't there. If anything, MRK is a hold right here and probably can be considered a good anchor for a portfolio, but i would not expect the stock price to move too quickly unless we begin to see some unexpected good news come out. One thing to keep in mind, MRK usually meets or beats estimates so the $4.97 may be a little conservative. On a trading note, if MRK gaps down today on the open (i.e., today's opening price is below yesterday's low price), it may be a good buy for a short term trade as MRK always fills its gaps. Regards

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