HALISTER: Merck Raises Low End of Year EPS View by 2c; 2Q Adj. EPS Beat

Merck Raises Low End of Year EPS View by 2c; 2Q Adj. EPS Beat

(Bloomberg) -- Merck raises year adj. EPS view to $3.67-$3.77, had seen $3.65-$3.77 in May, est. $3.72 (range $3.66-$3.77); forecast includes 1% negative FX effect.
  • Narrows year rev. view to $39.1b-$40.1b vs $39.0b-$40.2b prior, est. $39.5b, includes negative 2% FX effect
  • 2Q adj. EPS 93c, est. 91c (range 84c-94c).
  • 2Q rev. $9.84b, est. $9.79b
    • Product sales:
    • Januvia+Janumet $1.634b, est. $1.598b
    • Zetia + Vytorin $994m vs $955m y/y
    • Gardasil/Gardasil 9 $393m, may not compare to est. $457.2m
    • Proquad/MMR II/Varivax $383m vs $358m y/y
    • Cubicin $357m, est. $282.1m
    • Remicade $339m, est. $325.1m
    • Isentress $338m, est. $347.4m
    • Keytruda $314m, est. $287.2m
    • Animal Health rev. $898m vs $840m y/y
  • “Business development remains a critical component” of strategy; is “actively engaged in seeking external opportunities to complement and strengthen” pipeline and portfolio: CEO Kenneth C. Frazier
  • MRK EARNINGS PREVIEW: Keytruda Performance; Impacts of SGLT2s
  • Call 8am 706-758-9927 pw 34462082
Statement:
Alert: HALISTER
Source: BFW (Bloomberg First Word)

Tickers
MRK US (Merck & Co Inc)
CSL AU (CSL Ltd)
JNJ US (Johnson & Johnson)
4508 JP (Mitsubishi Tanabe Pharma Corp)

People
Kenneth Frazier (Merck & Co Inc)

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UUID: 7947283

(2) *CHINA APPROVES AB INBEV-SABMILLER DEAL WITH CONDITIONS

*CHINA APPROVES AB INBEV-SABMILLER DEAL WITH CONDITIONS

Alerts: HALISTER, HALISTER1
Source: BN (Bloomberg News)

Tickers
ABI BB (Anheuser-Busch InBev SA/NV)
SAB LN (SABMiller PLC)
MOCZ CH (People's Republic of China Ministry of Commerce)

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UUID: 7947283

HALISTER1: EUR 6m10y Cheap vs Implied Volatility on Short Tails: Barclays

EUR 6m10y Cheap vs Implied Volatility on Short Tails: Barclays

(Bloomberg) -- EUR 6m10y vols are now looking cheap compared with vols on shorter tails, which have not declined despite the ECB’s reluctance to cut rates aggressively, Barclays strategists including Amrut Nashikkar write in a client note.
  • Recommend buying 6m10y receiver spread and selling 6m2y1y low strike receiver to benefit from a potential bull- flattening of the curve
    • Buy EUR100m 6m10y receiver spread struck ATM vs ATM-20bp
    • Sell EUR1b 6m2y1y receiver struck ATM-5bp
  • At initiation, trade is net short duration of ~EU2k/bp and short vol ~EU3k/abpv exposure
  • Earns ~70c (or 7bp of 10y DV01) in carry if the rates curve remains unchanged over the next six months
  • Sharp rally in front-end rates would be required for the trade to begin losing on expiry
  • Since 6m10y vols are richer from an absolute level perspective, conventional bull-flatteners using ATM receivers would require an upfront premium so therefore recommend initiating this alternative structure
Alert: HALISTER1
Source: BFW (Bloomberg First Word)

People
Amrut Nashikkar (Barclays PLC)

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UUID: 7947283