Markets & Finance

Merrill Cuts Merck to 'Long-Term Neutral'

Merrill Lynch downgraded Merck (MRK) to long term neutral from buy.

Analyst Steven Tighe says this revenue amount, which was booked but not received, never had an impact on the earnings per share of Medco or Merck. However, he notes the size is fairly significant compared to Medco's revenues.

Tighe believes this may reduce the likelihood that the Medco IPO gets done at this time. Tighe says he's concerned about any further irregularities that may be found, as well as concerns generated by an SEC investigation regarding Medco's ability to secure new contracts.

He sees $3.14 2002 EPS, and $3.36 for 2003. He rates Merck near term neutral.

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