By Sam Boughedda
Investing.com —Merck & Company Inc (NYSE:MRK) shares edged up 0.4% on Friday after Goldman Sachs analyst Chris Shibutani started coverage of the pharmaceutical company with a conviction buy rating.
The analyst set a price target of $93 on the shares, implying a 22% upside from current levels.
Shibutani noted that there had been a series of disappointing updates from the company regarding molnupiravir, Merck's Covid pill, and islatravir its HIV drug, but other assets were undervalued.
"Against a backdrop dominated by the challenge of growing and diversifying revenues beyond the significant success of Keytruda, MRK shares have notably underperformed. Through our analysis of Growth portfolio and pipeline assets, however, we believe the market is undervaluing the outlook for several asset," the Goldman's analyst said in a research note, pointing to sotatercept, and Vaxneuvance and Gardasil as undervalued assets.
Sotatercept is Merck's pulmonary arterial hypertension treatment, Vaxneuvance a vaccine for the prevention of invasive disease caused by streptococcus pneumonia, and Gardasil, a vaccine intended to protect against diseases caused by Human Papillomavirus.
Shibutani concluded by adding that Goldman's sees Merck as "having capacity to pursue significant business development opportunities, and note optionality from its Animal Health business," which they view as underappreciated.
Elsewhere, Merck announced ahead of the opening bell that the Committee for Medicinal Products for Human Use of the European Medicines Agency has taken a positive opinion on recommending Keytruda, the company's therapy for the treatment of adults with renal cell carcinoma.