Jefferies Raises Merck (MRK) Price Target, Maintains Buy Rating

Merck & Company, Inc. (NYSE:MRK) is one of the high-margin pharma stocks to buy now. Jefferies has raised its price target on Merck & Co. (NYSE: MRK) to $141 from $138 while maintaining a Buy rating, citing increased conviction in the company’s recent acquisition of Verona Pharma. The firm’s analysts see the $10 billion deal as a strategic step to diversify Merck’s pipeline and reduce long-term reliance on its flagship cancer drug, Keytruda.

Jefferies Raises Merck (MRK) Price Target, Maintains Buy Rating

A close-up of a person’s hand holding a bottle of pharmaceuticals.

In a research note, Jefferies highlighted Verona’s lead asset, ensifentrine, as a potentially meaningful addition to Merck’s respiratory portfolio. The drug, which is being developed for chronic obstructive pulmonary disease (COPD), offers a differentiated mechanism of action and a favorable safety profile, according to analysts. They estimate the acquisition could add approximately $3 per share in value under a base-case scenario. Even under more conservative assumptions, the transaction is still expected to be accretive.

The target increase comes as Merck & Co. (NYSE: MRK) continues to face pressure to shore up its post-Keytruda growth strategy, with the immunotherapy expected to lose U.S. exclusivity in the coming years. Jefferies’ revised outlook signals confidence in Merck’s ability to execute on strategic M&A while maintaining earnings visibility. Shares of Merck have remained stable following the announcement, reflecting cautious investor optimism as the company pivots toward new therapeutic areas.

While we acknowledge the risk and potential of MRK as an investment, our conviction lies in the belief that some AI stocks hold greater promise for delivering higher returns and doing so within a shorter time frame. If you are looking for an AI stock that is more promising than MRK and that has 10,000% upside potential, check out our report about this cheapest AI stock.

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Disclosure: None. This article is originally published at Insider Monkey.