BofA Turns More Positive on Merck (MRK) Pipeline

Merck & Co., Inc. (NYSE:MRK) is included among the 12 Best Dogs of the Dow to Invest in.

On December 15, BofA raised its price target on Merck & Co., Inc. (NYSE:MRK) to $120 from $105 and kept a Buy rating. The analyst said the stock is starting to look more appealing as the pipeline has “rounded out,” and noted that the firm is now basing its valuation on a new FY27 EPS estimate.

That optimism comes against a mixed backdrop. Sales of Merck’s HPV vaccines, Gardasil and Gardasil 9, have dropped sharply this year, largely because demand in China has cooled. At the same time, Keytruda, the cancer drug that drives a large share of Merck & Co., Inc. (NYSE:MRK)’s revenue, is staring down tougher competition over the next five years, including the eventual arrival of biosimilars. Investors looking ahead have been uneasy with what that means for the company’s medium-term growth profile.

Still, Merck & Co., Inc. (NYSE:MRK) is not standing still. New approvals and a deeper pipeline are expected to help offset pressure on its biggest franchises. One clear example is in vaccines. Last year, the company won approval for Capvaxive, a pneumonia vaccine designed to reach a broader group of patients than competing options. Since then, the launch has gained traction. In the third quarter alone, Capvaxive brought in $244 million in sales.

Merck & Co., Inc. (NYSE:MRK) operates as a global biopharmaceutical company focused on discovering, developing, and delivering medicines, vaccines, and animal health products, with the aim of improving and saving lives around the world.

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