Deutsche Bank Upgrades Merck (MRK) to Buy, Sees "Clear Path" Beyond Keytruda Patent Cliff

Merck & Co., Inc. (NYSE:MRK) is included among the 16 Best Dividend Stocks with Rising Payouts.

On February 13, Deutsche Bank analyst James Shin upgraded Merck & Co., Inc. (NYSE:MRK) to Buy from Hold. The analyst raised his price target on the stock to $150 from $115. In a research note, he said the market appears to be undervaluing the company because of concerns around Keytruda’s upcoming patent expiration. His analysis pointed to a “clear path” for Merck to manage this transition. He also noted that, excluding Keytruda, the company still has visible growth drivers, with a trough earnings “formation at hand.”

Earlier, on February 3, Merck issued a 2026 forecast that came in below Wall Street expectations. The company said the upcoming loss of exclusivity for its diabetes drug Januvia and other older medicines will have a bigger impact than analysts had anticipated. This softer outlook came despite a strong fourth quarter, when Merck beat both profit and sales estimates, supported by continued demand for Keytruda.

Merck expects 2026 revenue to range between $65.5 billion and $67.0 billion. The high end of that range still falls short of the average analyst estimate of $67.6 billion, based on LSEG data. The company also expects a $2.5 billion headwind this year. This includes the impact of generic competition, Medicare price negotiations, and lower sales of its COVID-19 treatment, Lagevrio. “Where the disconnect is coming with the Street, frankly, is in a lot of our legacy products, and these are products that are all largely going off patent,” CEO Rob Davis said in an interview. He added that drugs such as Januvia, along with related treatments Janumet and Janumet XR, and Bridion, which is used to reverse the effects of muscle relaxants, could deliver weaker results than analysts currently expect.

Merck & Co., Inc. (NYSE:MRK) operates as a global healthcare company. It develops and delivers prescription medicines, including biologic therapies, vaccines, and animal health products. Its Pharmaceutical segment focuses on human health treatments and vaccines.

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