Merck: We Were Wrong, But The Exuberance Is Overly Done Here (Rating Upgrade)


  • We have been overly cautious in our previous articles, as MRK runs away to outperform the wider market, thanks to the ever increasing Keytruda indications and successful acquisitions.
  • With Keytruda receiving 14 new approvals in 2022, 15 in 2023, and 3 YTD, the management is working hard to extend the LOE while introducing a new subcutaneous administration.
  • We may also see the FY2024 guidance moderately raised, given the recently approved Winrevair, with it expected to generate up to $8.2B in peak annual sales.
  • MRK has a GLP-1 candidate in the clinical trial phase 2, efinopegdutide, with it outperforming semaglutide for weight loss and liver fat content moderation.
  • However, with the stock currently priced for perfection, interested readers may want to add after a moderate pullback for an improved margin of safety.

Woman pulling large pink helium balloon with rope

Klaus Vedfelt

We previously covered Merck (NYSE:MRK) in November 2023, discussing its intermediate term uncertainty as Keytruda faced the first patent expiry in the US by 2028.

As a result, we believed that the management might engage in further acquisitions

Analyst’s Disclosure: I/we have no stock, option or similar derivative position in any of the companies mentioned, and no plans to initiate any such positions within the next 72 hours. I wrote this article myself, and it expresses my own opinions. I am not receiving compensation for it (other than from Seeking Alpha). I have no business relationship with any company whose stock is mentioned in this article.

The analysis is provided exclusively for informational purposes and should not be considered professional investment advice. Before investing, please conduct personal in-depth research and utmost due diligence, as there are many risks associated with the trade, including capital loss.

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