Merck (MRK) Receives Upgrades To Top Rating Recommendation From 3 Firms

Merck (NYSE: MRK) shares are expected to see an upside swing on Thursday as three side-side firms upgraded the stock following the FDAs acceptance for review of the supplemental Biologics License Application (sBLA) for KEYTRUDA (pembrolizumab). Shares are up nearly 2% in Thursday's premarket trading..

Morgan Stanley upgraded MRK from Equalweight to Overweight and boosted their PT by $6 to $71 citing expected acceleration in growth as the firm "extends its leadership position in immuno-oncology." Morgan Stanley says MRK management strategy is delivering better results that previously expected.

Piper Jaffray upgraded from Neutral to Overweight and is expecting a conditional approval for the use of Keytruda and chemo in patients with lung tumors. The analyst commented "Going forward, with competition from other I/O combo treatments expected to enter in 2018 and beyond we expect meaningful erosion of Merck’s share, reflected in our forecast of 45% share in 2018 and 35% in 2019. That said Keytruda’s early lung boost drives meaningful upward earnings revisions."

Guggenheim upgraded shares from Neutral to Buy and commented "MRK has the entire non-squamous front line market in 2017 and will retain the 70-75% of the lower-expressing front line patients in 2018." The analyst further stated "If we assume approval of Keytruda plus chemotherapy in front line NSCLC occurs, our global numbers for Keytruda in 2017 and 2018 move from $3.1B to $3.69B and from $4.84B to $5.29B. Our overall revenues and earnings for MRK move from $3.83 to $3.91 and $4.10 to $4.15 respectively."

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