Daina Graybosch, an analyst from Leerink Partners, maintained the Buy rating on Merck & Company (MRK – Research Report). The associated price target was raised to $115.00.
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Daina Graybosch’s rating is based on a combination of factors that influence Merck & Company’s stock outlook. Despite the risks associated with the CMS’s draft guidance for Medicare Drug Price Negotiation, which could impact Merck’s strategy to maintain Keytruda’s value, Graybosch sees potential upside for the stock. The draft guidance suggests that subcutaneous Keytruda, which includes berahyaluronidase alfa for biodistribution, might be grouped with the infusion version for price negotiations, potentially affecting its market share.
However, even under a more conservative scenario where the subcutaneous version captures a smaller market share, Graybosch estimates that the stock price target remains above its current level, indicating meaningful upside. Additionally, the U.S. House of Representative’s Budget Reconciliation Bill and CMS’s draft guidance could lead to reforms that might benefit Merck in the long term, particularly with the expansion of the orphan disease exception for price negotiations. These factors contribute to the Buy rating, reflecting confidence in Merck’s ability to navigate these challenges and capitalize on future opportunities.
Graybosch covers the Healthcare sector, focusing on stocks such as BioNTech SE, Merck & Company, and Gilead Sciences. According to TipRanks, Graybosch has an average return of -16.3% and a 30.73% success rate on recommended stocks.
In another report released on April 29, Guggenheim also reiterated a Buy rating on the stock with a $108.00 price target.