Merck's valuation and guidance
BMO Capital raised its price target for Merck (MRK) to $135.00 from $130.00 while retaining an Outperform rating on the pharmaceutical stock. At the time of the update, Merck was trading at $115.84 and carried a price-to-earnings ratio of 15.57, a level that InvestingPro Fair Value estimates treat as indicative of the shares trading below fair value.
Patent timing and Keytruda
The price-target increase follows comments from Merck management indicating that additional patents with expirations in May and November 2029 could extend the intellectual property protection for Keytruda past the drug’s currently expected 2028 patent expiry. BMO Capital analyst Evan David Seigerman highlighted that such an extension could "further smooth revenue declines associated with the Keytruda LOE [loss of exclusivity]" and could maintain protection through the end of 2029.
BMO said the prospect of extended patent protection supports the rationale behind its earlier upgrade of Merck shares and suggested there remains "significant room for MRK share appreciation throughout the year," even after characterizing Merck’s 2026 guidance as "conservative" in a recent company call.
Other analyst moves and company updates
Several other brokerages have also revised their Merck outlooks. Wells Fargo raised its price target to $135 from $125 and kept an Overweight rating, citing new product launches and a late-stage pipeline despite concerns tied to products losing exclusivity. Morgan Stanley moved its target to $109 from $101 with an Equalweight rating, reflecting Merck’s 2026 revenue guidance of $65.5 billion to $67.0 billion, which the firm interprets as a 1-3% increase versus 2025.
BofA Securities adjusted its target to $132 from $124 and maintained a Buy rating, noting a more cautious stance on loss-of-exclusivity products and U.S. Gardasil sales. In a separate corporate update, Merck declared a quarterly dividend of $0.85 per share for the second quarter of 2026, payable on April 7, 2026.
Finally, Truist Securities’ commentary on Revolution’s stock mentioned reports that Merck and Revolution were unable to agree on price in potential acquisition discussions, a negotiation outcome flagged in analysts’ coverage.
Context and investor takeaway
The BMO action, supported by management’s patent-related remarks, reinforces a cautiously optimistic view of Merck’s near-term upside while also reflecting the market’s sensitivity to Keytruda’s loss of exclusivity timeline and the company’s 2026 guidance. The cluster of analyst target changes underscores how product launches, pipeline progress and exclusivity dynamics are shaping sell-side assessments.