Analyst Evan Seigerman of BMO Capital maintained a Hold rating on Merck & Company, retaining the price target of $82.00.
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Evan Seigerman has given his Hold rating due to a combination of factors surrounding Merck & Company’s recent strategic moves and market expectations. The acquisition of Cidara Therapeutics, with its promising antiviral candidate CD388, presents both opportunities and uncertainties. While CD388 offers potential as a preventative treatment, which could differentiate it from existing antivirals like Tamiflu, the high sales expectations set by management remain speculative without Phase 3 data to substantiate them.
Moreover, the valuation of the deal, estimated at approximately $9.2 billion, introduces significant risk, especially with the interim Phase 3 readout not expected until 2026. This readout will be crucial in assessing CD388’s efficacy in a new patient population, which differs from those previously studied. Despite Merck’s strong track record in commercializing vaccines and antivirals, the uncertainties surrounding the Gardasil franchise and future growth beyond Keytruda’s loss of exclusivity contribute to the cautious outlook, justifying the Hold rating.
In another report released today, Citi also maintained a Hold rating on the stock with a $95.00 price target.