TD Cowen cuts Merck stock to hold on uncertainty around Keytruda, Gardasil

Investing.com -- TD Cowen downgraded Merck &Company Inc (NYSE: MRK) to "Hold" on concerns over uncertainty surrounding Gardasil sales, a slowdown in business development, and the looming loss of exclusivity for blockbuster cancer drug Keytruda.

Analyst at TD Cowen said Merck (NSE:PROR)'s valuation would likely bottom out in 2026, two years before Keytruda's U.S. patent expires in 2028. "The story other than Keytruda has not improved convincingly," they wrote.

TD Cowen had upgraded Merck in early 2024 based on confidence in Keytruda and Gardasil’s performance, a lack of binary risks, and an attractive valuation. However, setbacks in Gardasil’s China sales and heightened uncertainty have eroded that thesis, the firm said.

Merck’s earnings estimates for 2025-2030 were lowered, with 2030 EPS now forecast to be significantly below 2024 levels. TD Cowen cut its price target on Merck from $121 to $100, citing weaker growth visibility.

Despite upcoming regulatory and pipeline milestones, TD Cowen said few appear capable of meaningfully changing Merck’s trajectory. Key events include Phase III data on an oral PCSK9 inhibitor in mid-2025 and regulatory progress on Keytruda SQ.

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