Scotiabank Lifts Merck (MRK) Target as Execution Continues to Impress

Merck & Co., Inc. (NYSE:MRK) is included among the 15 Best Wide Moat Dividend Stocks to Invest in.

Scotiabank Lifts Merck (MRK) Target as Execution Continues to Impress

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On February 4, Scotiabank raised its price target on Merck & Co., Inc. (NYSE:MRK) to $136 from $120 and maintained an Outperform rating. The firm said the higher target reflects multiple expansion, noting that Merck’s execution continues to run ahead of its expectations.

That upgrade came shortly after Merck issued a softer outlook for 2026. On February 3, the company said both sales and profits next year are likely to fall below Wall Street estimates. Management pointed to the upcoming loss of exclusivity for its diabetes drug Januvia and other older products, saying the impact could be larger than analysts currently expect.

The cautious forecast overshadowed what was otherwise a strong fourth quarter. Merck beat both revenue and earnings expectations, driven by continued demand for its cancer immunotherapy Keytruda. Still, the longer-term picture drew more attention. The company expects 2026 revenue to range from $65.5 billion to $67.0 billion, with even the high end coming in below the $67.6 billion consensus estimate, according to LSEG. Merck also flagged about $2.5 billion in pressure this year from a mix of factors. That includes rising generic competition, Medicare price negotiations, and weaker sales of its COVID-19 treatment, Lagevrio, CEO Rob Davis said in an interview.

Davis added that several drugs could underperform expectations, including Januvia, related therapies Janumet and Janumet XR, and Bridion, which is used to reverse the effects of muscle relaxants. While some of these products are weighing on near-term results, management has been clear about where it wants investors to look next, emphasizing longer-term growth drivers across the broader portfolio.

Merck & Co., Inc. (NYSE:MRK) is a global healthcare company focused on prescription medicines, spanning biologic therapies, vaccines, and animal health products, with its pharmaceutical business centered on human health drugs and vaccines.

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