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Merck & Co. Hold Rating: Balancing Gardasil Weakness and Keytruda Growth Amid Restructuring Efforts

Merck & Co. Hold Rating: Balancing Gardasil Weakness and Keytruda Growth Amid Restructuring Efforts

Evan Seigerman, an analyst from BMO Capital, maintained the Hold rating on Merck & Company. The associated price target remains the same with $82.00.

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Evan Seigerman has given his Hold rating due to a combination of factors affecting Merck & Company’s performance. The company experienced a slight miss in its topline revenue, primarily due to continued weakness in Gardasil sales, particularly in China and Japan. The completion of Japan’s catch-up immunization program further contributed to this underperformance. Despite these challenges, Merck’s oncology product Keytruda and Winrevair showed positive growth, slightly offsetting the negative impact of Gardasil’s performance.
Additionally, Merck’s bottom line benefited from lower operating expenses, resulting in a modest beat. The company’s new restructuring program is expected to generate significant cost savings annually, which could improve financial performance in the long term. However, uncertainty surrounding the Gardasil franchise and concerns about growth beyond Keytruda’s loss of exclusivity continue to weigh on the stock, justifying the Hold rating.

In another report released today, Wells Fargo also maintained a Hold rating on the stock with a $90.00 price target.

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