S&P500, NASDAQ are Little Changed After Latest Inflation Report

The stock market was mixed on Wednesday as latest economic report showed a faster inflation data. The consumer price index rose 0.6% in August – its largest monthly increase in 2023. It was also up 3.7% from a year ago.

Overall, S&P 500 increased 0.1% to 4,467, while NASDAQ grew 0.3% to 13,814.

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Here is the ten-year chart of Merck (MRK) as of August 31, 2023, when the stock was at $109.

Merck is a global healthcare company that provides customers with patented prescription medicines, vaccines, biological therapies, and animal health products.

Merck delivered a robust performance last quarter driven by demand across its innovative portfolio. The company delivered 5% profit growth on 3% revenue growth last quarter. However, revenue growth was 11% excluding Lagevrio, a COVID-19 therapeutic which isn’t being utilized much nowadays. Growth was driven by oncology in Keytruda and vaccine sales with Gardasil. Keytruda is being used for tumors including melanoma, lung cancer, as well as head and neck cancers, while Gardasil is being used for human papillomavirus.

Merck also made important progress in its pipeline, especially in cancer treatments and a new vaccine for adults called V116, a pneumococcal conjugate vaccine designed for adults. They had good results in cancer trials, especially for earlier-stage patients, and positive results in Phase III trials for V116. Merck closed on its acquisition of Prometheus, a company that specializes in autoimmune diseases. Prometheus has a drug PRA023 in development to treat Ulcerative colitis and Crohn’s disease. Management sees both as mult-billion dollar opportunities later in the decade.

The P/E is only 15 so the stock seems like a value. MRK is part of the Conservative Growth Portfolio.

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