Analyst Tim Anderson of Bank of America Securities maintained a Buy rating on Merck & Company (MRK – Research Report), retaining the price target of $118.00.
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Tim Anderson’s rating is based on several compelling factors that make Merck & Company’s stock an attractive buy. Despite recent challenges with Gardasil, which have impacted future sales projections, the stock is considered undervalued. This undervaluation is highlighted by a price-to-earnings ratio of approximately 10x, which is low for a company with Merck’s growth potential. Furthermore, Merck’s robust late-stage pipeline and its strong research and development capabilities contribute to its overall appeal.
Tim Anderson acknowledges that while the immediate outlook for the stock may not indicate a rapid rebound, the long-term prospects are promising. The potential for growth, even with the anticipated patent expiry of Keytruda, is seen as less detrimental to Merck’s financial performance than some investors fear. Given these factors, the upside potential for Merck’s stock outweighs the downside risks, justifying a Buy rating even amidst current market challenges.
In another report released yesterday, Goldman Sachs also maintained a Buy rating on the stock with a $135.00 price target.