15 August 2012 11:01 [Source: ICIS news]
LONDON (ICIS)--UBS has raised its target share price for Merck after the Germany-based chemicals and pharmaceuticals producer reported improved second-quarter earnings, the investment bank said on Wednesday.
Merck’s 12-month target share price was raised to €98.00 ($120.99), from €93.00.
UBS said: “We maintain our thesis on Merck: we continue to see potential for stock performance on quarterly results, both on reported numbers and from management commentary on progress with restructuring.”
On Tuesday, Merck reported a second-quarter loss after tax of €60.5m, compared with a loss of €86.8m in the corresponding period of 2011, as sales rose on improved demand.
The group’s sales were up by 11% in the second quarter, to €2.74bn compared with €2.47bn in the same period last year. Merck said the rise reflected organic sales growth of 5.1%, a 5.4% positive benefit from foreign exchange rates and a 0.5% increase from acquisitions and divestments.
“Merck’s earnings per share (EPS) was –€0.29 in the second quarter of 2012 compared to –€0.41 in the year-ago quarter,” the company added.
Company chairman Karl-Ludwig Kley said: “Merck reported solid second-quarter results due to healthy demand in all our businesses, tight cost management, and favourable currency exchange rates.”
Beyond 2012, UBS also raised its EPS estimates for Merck by 1–3%, “primarily off strength in the pharma business”, it said.
At 09:40 GMT, Merck's share price on Germany's XETRA stock exchange was trading at €87.01, up by 1.17% from the previous close.
($1 = €0.81)
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