Can Merck (MRK) Stay Undervalued If Cash Flow Keeps Growing?

Merck has had a strong multi year run and is now back in the spotlight after fresh oncology headlines. This raises an important question for investors who focus on cash flows: Is the current share price mainly a reaction to recent news flow, or a reflection of what the company’s future cash generation can reasonably support? Merck has returned 92.3% over the past 5 years, so a lot of optimism is already embedded and the key issue is what level of cash flows can support that kind of...