Wells Fargo lifts Merck target to $170 with 'overweight' rating
Wells Fargo & Company raised its price target on Merck & Co., Inc. (NYSE:MRK) to $170.00 from $150.00 in a research note issued on Friday, the brokerage said. Wells Fargo kept an "overweight" rating on the stock and indicated the new target would imply a potential upside of 12.50% from the share price at the time of the note.
Brokerage shifts cluster around buy ratings and higher targets
The Wells Fargo revision added to a cluster of upward moves on Merck. Daiwa Securities Group raised its rating to "outperform" with a $143.00 target on August 12. UBS Group lifted its target to $175.00 from $145.00 with a "buy" rating on August 20. Argus increased its target to $170.00 from $145.00 on August 25, while Guggenheim nudged its target to $146.00 from $145.00 on August 5. Morgan Stanley upgraded Merck from "equal weight" to "overweight" and boosted its price objective to $179.00 from $116.00.
Analyst consensus and trading levels
MarketBeat tallying across analysts showed 15 rating Merck a Buy and eight rating it a Hold, producing a consensus "Moderate Buy" with an average target of $148.60. Merck shares recently traded at $151.11, near the 52-week high, after the company reported quarterly revenue of $16.61 billion, above expectations, with revenue growth of 5.1% year over year.
Valuation split with discounted cash flow view
A separate analysis framed Merck's valuation as mixed. The shares scored 2 out of 6 on broader valuation checks, while a discounted cash flow model pointed to an intrinsic value of about $233 per share, implying roughly 34.6% undervaluation versus the market price. By contrast, the stock traded on a P/E of about 118.5x, well above the pharmaceuticals industry average of 16.5x and a peer-group average of 30.9x, against a modeled fair P/E of 48.8x, which placed the shares above typical earnings multiples. The analysis also cited LIPFENDRA's status as the first FDA-approved oral PCSK9 inhibitor as a focus for future cash flow assumptions.
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