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Investing.com - Cantor Fitzgerald has maintained its Neutral rating and $83.00 price target on Merck (NYSE:MRK) following the company’s presentation on Thursday. The pharmaceutical giant, currently trading at $83.71, boasts a market capitalization of $210.2 billion and maintains an impressive 55-year streak of consistent dividend payments, with a current yield of 3.87%.
The research firm conducted a pro-forma analysis of Merck’s potential Verona Pharma (NASDAQ:VRNA) transaction, examining its financial implications under various assumptions.
Cantor Fitzgerald’s analysis suggests the Verona acquisition would enhance Merck’s top-line growth profile, even without considering potential revenue synergies from the combined operations.
The firm projects the deal could become accretive to Merck’s non-GAAP earnings per share by approximately 4 cents in 2027, assuming zero operational synergies between the companies.
Cantor Fitzgerald noted that while Merck might increase spending across commercialization and R&D functions, it would require nearly 30% higher expenditures versus consensus estimates to delay the deal’s profitability to 2028 on a full-year basis.
In other recent news, Merck’s New Drug Application for doravirine/islatravir, a two-drug regimen for HIV-1 treatment, has been accepted by the U.S. Food and Drug Administration. The FDA has set a target action date for April 28, 2026. This application is backed by findings from two Phase 3 clinical trials, where the regimen showed comparable efficacy and safety to existing treatments. Additionally, Merck is nearing a significant acquisition of Verona Pharma, valued at approximately $10 billion. The acquisition would include Verona’s COPD treatment, Ohtuvayre, and is expected to close in the fourth quarter of 2025.
Jefferies has downgraded Verona Pharma’s stock from Buy to Hold, following the acquisition news, and adjusted the price target to $107.00. Meanwhile, UBS has maintained a Buy rating for Merck, citing Gardasil as a key driver despite current investor sentiment. UBS forecasts continued growth for Merck’s cancer drug Keytruda and the new launch of Winrevair. Merck is also set to present new data from its HIV research pipeline at the upcoming International AIDS Society Conference.
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