In a report released yesterday, Tim Anderson from Bank of America Securities reiterated a Buy rating on Merck & Company, with a price target of $105.00.
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Tim Anderson has given his Buy rating due to a combination of factors including Merck & Company’s strategic acquisition of Cidara Therapeutics. This acquisition, valued at approximately $9 billion, introduces CD388, a promising drug designed for flu prevention, which has shown significant efficacy in clinical trials. The drug complements Merck’s existing Infectious Disease franchise and has the potential for substantial commercial success, despite the challenges in the preventative respiratory therapeutics market.
Additionally, Anderson believes that Merck’s current stock valuation does not fully reflect its growth potential, both in the short and long term. The company’s strategic moves, such as the Cidara acquisition, are expected to mitigate potential revenue declines from upcoming patent expirations, particularly for Keytruda. By raising the price objective from $98 to $105, Anderson underscores the improved long-term earnings visibility and the belief that Merck’s stock is undervalued relative to its growth prospects.
In another report released yesterday, Jefferies also maintained a Buy rating on the stock with a $138.00 price target.