Analyst Tim Anderson from Bank of America Securities reiterated a Buy rating on Merck & Company and keeping the price target at $99.00.
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Tim Anderson’s rating is based on Merck & Company’s strategic acquisition of Verona Pharma, which is expected to enhance its respiratory portfolio significantly. The acquisition includes Ohtuvayre, a promising product for COPD, with potential sales projected to reach $3.5 billion by 2032. This move not only strengthens Merck’s position in the US market but also opens up opportunities for expansion into other respiratory conditions.
Furthermore, despite a slight near-term dilution, the acquisition is anticipated to be accretive by 2027, aligning with Merck’s long-term growth strategy. The deal is seen as a strategic fit, especially as Merck prepares for the upcoming biosimilar competition for Keytruda. Anderson believes that while the acquisition is a positive step, ongoing M&A activities will be crucial for maintaining investor confidence and offsetting challenges from the Gardasil overhang and Keytruda’s competitive landscape.
According to TipRanks, Anderson is a 4-star analyst with an average return of 8.9% and a 63.44% success rate. Anderson covers the Healthcare sector, focusing on stocks such as Eli Lilly & Co, Gilead Sciences, and Amgen.
In another report released on July 7, J.P. Morgan also maintained a Buy rating on the stock with a $130.00 price target.