Key Stats for Merck Stock
- Current Price: $148.74
- Target Price (Mid): ~$166
- Street Target: ~$154
- Potential Total Return: ~12%
- Annualized IRR: ~3% / year
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What Happened?
Daiichi Sankyo and Merck (MRK) withdrew their application for accelerated U.S. approval of ifinatamab deruxtecan, an investigational cancer drug they co-develop, in previously treated small cell lung cancer. The FDA had indicated the supporting data, including Phase 2 results first presented in October 2025, fell short. The companies announced the withdrawal after the September 25 close, with shares at $148.74.
The withdrawal came 11 days after CEO Robert Davis said Merck’s recent data readouts “have all pretty much turned over positive.” The conference transcript in Merck’s investor relations materials shows he also argued the company’s pipeline estimate has upside.
Terns and MK-2010 Are Not in the $70 Billion Estimate
Merck sees more than $70 billion of non-risk-adjusted commercial opportunity from its pipeline by the mid-2030s. In February, it set that figure against $35 billion in consensus 2028 peak Keytruda revenue. At the Morgan Stanley Global Healthcare Conference on September 14, Davis said “you should assume we see upside to the $70 billion.”
TERN-701, an investigational oral leukemia drug from the $6.7 billion Terns acquisition announced in March, is not in the figure; Davis called it a “multibillion-dollar opportunity.” Neither is MK-2010, a PD-1/VEGF bispecific Merck licensed after a rival in that class beat Keytruda in a head-to-head trial. Merck is a late entrant to the class, but it now holds a stake in the drug type that threatens its biggest product.
INT, the personalized cancer vaccine Merck develops with Moderna (MRNA), is already in the figure, but Davis said its opportunity “probably could be bigger.” He also wants LIPFENDRA, Merck’s new oral cholesterol pill, to lift use of its drug class to 50% or more of eligible patients, from the roughly 5% he cited. These are management ambitions, not updated guidance.
Consensus has moved up as well. With 12 analysts contributing at both dates, the FY2030 revenue estimate rose from around $70 billion on December 31, 2025, to around $76 billion on September 28, 2026.
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A 17x Multiple Leaves Less Room for Setbacks
The withdrawal was voluntary, the application had Priority Review, and Daiichi Sankyo says Phase 3 enrollment in IDeate-Lung02 is near completion. On September 24, remigromig, an experimental eye drug, matched the standard drug ranibizumab on vision in diabetic macular edema, but Merck is still studying higher rates of worsening retinopathy, eye bleeding, and discontinuations. The FDA approved Welireg plus Lenvima in previously treated kidney cancer the same day, though the trial missed on overall survival.
Setbacks cost more at 17x. Merck’s NTM P/E rose from about 9x on September 30, 2025, to about 17x on September 25, 2026, while the next-12-month normalized EPS estimate slipped. The rally over that span came entirely from a higher multiple.
That multiple sits above Bristol Myers Squibb (BMY) at about 10x but below Johnson & Johnson (JNJ) at about 24x and Eli Lilly (LLY) at about 28x. Holding the premium to Bristol requires the pipeline to replace Keytruda. Closing the gap with Johnson & Johnson requires Davis’s upside to reach reported numbers.
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TIKR Advanced Model Analysis
- Current Price: $148.74
- Target Price (Mid): ~$166
- Potential Total Return: ~12%
- Annualized IRR: ~3% / year
See analysts’ growth forecasts and price targets for Merck stock (It’s free!) >>>
The TIKR model’s mid case targets around $166 by December 31, 2030, measured from the $148.78 entry price. Its inputs, shown over 2025 to 2035, assume revenue growth near 2% a year and net margins near 33%. That path implies new launches largely offset Keytruda rather than add to it.
The main risk is Keytruda’s 2028 U.S. patent expiry arriving before replacements scale. Street targets run from around $105, about 29% below the September 25 close, to around $186, about 25% above it.
Conclusion
One-year remigromig results arrive at the AAO meeting on October 10. Merck’s oncology investor event at ESMO on October 26 and third-quarter results on October 29 follow. Clearer eye-safety numbers and a disclosed development plan for MK-2010 or TERN-701 would give Davis’s upside concrete form. A formal raise of the $70 billion figure may wait for the start-of-year timing he pointed to. Another regulatory stumble first would leave a 17x stock priced for upside it has not yet shown.
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Should You Invest in Merck?
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Disclaimer:
Please note that the articles on TIKR are not intended to serve as investment or financial advice from TIKR or our content team, nor are they recommendations to buy or sell any stocks. We create our content based on TIKR Terminal’s investment data and analysts’ estimates. Our analysis might not include recent company news or important updates. TIKR has no position in any stocks mentioned. Thank you for reading, and happy investing!
