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Merck downgraded to Market Perform from Outperform at BMO Capital

BMO Capital downgraded Merck (MRK) to Market Perform from Outperform with a price target of $105, down from $136. The firm cites Merck’s commercial overhangs, namely the Gardasil franchise in China, and the need for additional clarity on how the company plans to fill the Keytruda gap with Inflation Reduction Act negotiation and biosimilars on the horizon for the downgrade. Given a “mounting skepticism across Pharma,” BMO sees Merck shares “potentially stuck in limbo” over the next 12 months with more attractive options available elsewhere.

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