Merck Stock Valuation Sparks Concern Amid Cancer Vaccine Breakthrough
A recent clinical trial by Merck has produced promising results for its cancer vaccine. The data exceeded expectations, but analysts are still cautious about the stock's valuation. RBC Capital downgraded Merck to 'Sector Perform' from 'Outperform', citing concerns that the stock is overvalued at $150.
The company's best-selling drug, Keytruda, will lose its patent protection in 2028, which could lead to cheaper competition and reduced revenue. However, BofA believes the recent trial results have strengthened confidence that Merck can offset these challenges. The firm raised its price target on Merck to $166 from $141.
Other analysts are more optimistic about Merck's prospects. BMO Capital raised its price target to $170 from $142 and maintained an 'Outperform' rating, citing the potential for significant growth in skin cancer treatments and other solid tumors.