BofA Turns More Positive on Merck (MRK) Pipeline

Core Viewpoint - Merck & Co., Inc. (NYSE:MRK) is recognized as one of the 12 Best Dogs of the Dow to invest in, indicating a favorable investment outlook despite some challenges in its product pipeline [1]. Group 1: Analyst Ratings and Price Target - BofA has raised its price target for Merck to $120 from $105, maintaining a Buy rating, citing an improved outlook for the company's pipeline [2]. - The valuation is now based on a new FY27 EPS estimate, reflecting a more positive sentiment towards the stock [2]. Group 2: Sales Performance and Challenges - Sales of Merck's HPV vaccines, Gardasil and Gardasil 9, have significantly declined this year, primarily due to reduced demand in China [3]. - Keytruda, a major revenue driver for Merck, faces increasing competition over the next five years, including the anticipated entry of biosimilars, raising concerns about the company's medium-term growth [3]. Group 3: New Developments and Growth Opportunities - Merck is actively pursuing new approvals and expanding its pipeline to mitigate pressures on its key franchises [4]. - The company received approval for Capvaxive, a pneumonia vaccine, which has shown strong sales performance, generating $244 million in revenue during the third quarter [4]. - Merck operates as a global biopharmaceutical company focused on developing medicines, vaccines, and animal health products to improve lives worldwide [5].