Over the weekend, Merck & Co. officially stepped back from its pursuit of clinical-stage biotech Revolution Medicines after failing to reach an agreement on valuation. According to people familiar with the discussions, Merck had been considering a takeover that could have valued the oncology specialist at roughly $30 billion. While sources indicate talks may resume, the decision underscores Merck’s disciplined approach to deal size despite intense competition for RAS-pathway assets.

In the latest regulatory filings, Charles Schwab Investment Management increased its stake in Merck by 9.4%, adding 4.6 million shares to bring its total holdings to 53.9 million. DLD Asset Management and Norges Bank each initiated new positions valued at approximately $2.9 billion. Meanwhile, Cullen/Frost Bankers reduced its position by 7.0%, selling 17,082 shares. Collectively, institutional investors now control over 76% of Merck’s outstanding stock, reflecting broad confidence in the company’s long-term prospects.

Merck reported fourth-quarter earnings per share of $1.94, falling short of consensus by $0.14, but still delivering a 29.6% net margin and a return on equity exceeding 44%. The company declared a quarterly dividend of $0.85 per share, marking a 4.9% increase from the prior payout and equating to a 3.1% annualized yield. With a debt-to-equity ratio of 0.77 and a current ratio of 1.66, Merck’s balance sheet remains well-positioned to support ongoing R&D investments and shareholder distributions.

In recent weeks, eight research firms have raised their view on Merck, with BMO Capital Markets upgrading to ‘Outperform’ and lifting its target from $82 to $130. Goldman Sachs, Scotiabank and Bank of America each boosted their targets into the $120–$135 range, citing momentum in oncology sales and strong pipeline catalysts. Despite two sell ratings, the consensus from MarketBeat data remains a ‘Hold’ with an average target of $114.20, implying upside potential of more than 5% from current levels.