UBS analyst David Dai downgraded the rating on Merus to a Hold yesterday, setting a price target of $97.00.
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David Dai has given his Hold rating due to a combination of factors surrounding the acquisition of Merus by Genmab. The acquisition, valued at $8 billion in an all-cash deal, offers a 41% premium over the recent closing price, which reflects a significant valuation for Merus. The deal is anticipated to close in the first quarter of 2026 and includes Merus’ promising pipeline, notably the bispecific antibody petosemtamab, which is seen as a potential leader in treating head and neck cancer as well as colorectal cancer.
While the acquisition highlights the strategic value of Merus’ pipeline, there is limited overlap with Genmab’s existing projects, which could be advantageous. However, the Hold rating reflects a neutral stance, aligning the price target with Genmab’s offer of $97 per share, up from a previous target of $72. This adjustment suggests that while the acquisition price is fair, there may not be substantial upside potential beyond the agreed offer, thus warranting a Hold recommendation.
Dai covers the Healthcare sector, focusing on stocks such as Telix Pharmaceuticals, Summit Therapeutics, and Perspective Therapeutics. According to TipRanks, Dai has an average return of -19.0% and a 30.77% success rate on recommended stocks.
In another report released today, Barclays also downgraded the stock to a Hold with a $97.00 price target.