Big Pharma Boost: BofA Raises Price Target on Merck, Citing Strong Pipeline and Blockbuster Sales
It’s been a good month for pharmaceutical giant Merck (MRK), and Wall Street is taking notice. In a significant vote of confidence, Bank of America Securities recently boosted its price target for the company’s stock to $105, while maintaining a coveted “Buy” rating on the shares.
The move, initiated by BofA analyst Tim Anderson, comes on the heels of a strong quarterly performance and strategic moves that appear to be easing long-standing investor anxiety. The new target represents an increase from the previous $98 and suggests that BofA sees continued upward potential for the stock in the near term.
The Keytruda Anchor and a Rising Tide
A major source of Merck’s current strength continues to be its flagship oncology drug, Keytruda. The blockbuster immunotherapy has been a revenue powerhouse for the company, and its sales have continued to surge, surpassing $8.1 billion in the third quarter of 2025 alone. This impressive growth is a cornerstone of the company’s financial stability.
However, analysts and investors have long worried about the so-called “Keytruda Cliff,” the anticipated sharp drop in revenue when the drug’s patent expires in 2028. This is where Merck’s recent business developments and pipeline strength are winning over the skeptics.
Diversification Pays Off
The BofA upgrade specifically highlighted Merck’s strategic maneuvers, including its acquisition of Cidara Therapeutics. This deal brings an experimental flu drug into Merck’s portfolio, which BofA’s analyst described as a “novel asset with a high likelihood of technical success,” adding a valuable piece to Merck’s Infectious Disease franchise.
Furthermore, the performance of new products is generating considerable excitement. Winrevair, a treatment for pulmonary arterial hypertension launched last year, has quickly emerged as a potential blockbuster in its own right, generating $360 million in the third quarter. This puts it on an annual run rate of well over $1 billion.
Wall Street Sees a Future Beyond the Patent Cliff
The optimism isn’t limited to BofA. The broader analyst community is increasingly bullish, suggesting that Merck has successfully “de-risked” its future growth path. For instance, Wells Fargo recently upgraded Merck to an “Overweight” rating and raised its price target significantly to $125 per share.
Wells Fargo noted that the company is entering a “catalyst-rich period” over the next 12 to 18 months with numerous readouts across its pipeline. Analysts are now suggesting they “no longer see a major cliff” in the years following the Keytruda patent expiration, instead anticipating the company can continue to grow its top line. The current consensus price target across all analysts sits at approximately $108.21, with the stock itself having recently traded near its 52-week high, hitting levels around $105.84 in late November.
In short, the strong performance of its current drugs, combined with a confident and rapidly expanding pipeline, has given analysts like those at BofA the clarity needed to raise their forecasts and maintain a positive outlook for the pharmaceutical leader.
