Merck, Caterpillar, Whole Foods Upgraded

Merck, Caterpillar, and Whole Foods Market stocks are moving higher

May 11, 2017 at 10:04 AM
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Analysts are weighing in on blue-chip pharmaceutical stock Merck & Co., Inc. (NYSE:MRK), fellow Dow stock Caterpillar Inc. (NYSE:CAT), and grocery chain Whole Foods Market, Inc. (NASDAQ:WFM). Here's a quick roundup of today's bullish brokerage notes on shares of MRK, CAT, and WFM.

MRK Stock Edges Higher on FDA Nod

Merck stock is trading 1.4% higher at $64.82, after the Food and Drug Administration (FDA) approved the combination of MRK's Keytruda immunotherapy and chemotherapy to treat lung cancer. While Evercore ISI called this "a very significant opportunity" for Merck, J.P. Morgan Securities said it puts the drugmaker "in a leadership position in this $10bn+ segment of the market." And while Cowen raised its price target on MRK stock to $70 from $68, Jefferies said to sell the news as increased competition will likely create headwinds for the shares. Today's pop has Merck shares flirting with their 10% year-to-date breakeven mark, and an exodus of MRK options bears could help fuel the stock's fire.

CAT Stock Upgraded at BofA-Merrill Lynch

Analysts at BofA-Merrill Lynch upgraded CAT to "buy" from "neutral" and raised its price target to $120 from $105, saying Caterpillar earnings are "set to beat (estimates) all year long." This comes in the wake of CAT stock's post-earnings bull gap in late April, with the shares now up 40% year-over-year to trade at $101.74. More upgrades would likely draw a fresh batch of buyers to CAT's table, too. Of the 16 brokerages following Caterpillar shares, more than two-thirds maintain a "hold" or worse rating.

WFM Stock Rises on Earnings Beat, Board Shake-Up

Whole Foods Market last night reported stronger-than-expected earnings, and named a new CFO and five new board members. Wells Fargo upgraded WFM stock to "outperform" from "market perform," saying there are now "multiple ways to win with limited share downside risk." Plus, no fewer than four other brokerages increased their price targets on Whole Foods shares. Against this bullish backdrop, WFM stock has jumped 4.1% to trade at $37.73, and has now surged nearly 33% from its March double-bottom near $28.40. A continued surge by Whole Foods stock could shake some of the weaker bearish hands loose. Short interest on WFM accounts for 11.4% of the stock's available float, representing 5.1 days of pent-up buying demand, at the average pace of trading.


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