According to a report by the Wall Street Journal, Merck & Co. has discontinued discussions to acquire oncology-focused biotech Revolution Medicines. Earlier negotiations had valued the target at approximately $30 billion, representing a significant strategic move to bolster Merck’s oncology pipeline, particularly in targeted RAS and kinase inhibitor therapies. The breakdown of talks removes a potential transformative bolt-on acquisition and preserves Merck’s existing capital allocation plan for internal R&D and smaller deals.

In the latest 13F filings, Cullen Frost Bankers reduced its Merck stake by 7.0%, selling 17,082 shares and trimming its holding to 225,581 shares valued at $18.9 million. Conversely, Charles Schwab Investment Management increased its position by 9.4%, adding 4.64 million shares to reach 53.87 million shares (approximately $4.26 billion), while newcomers DLD Asset Management LP and Norges Bank each established stakes worth roughly $2.89 billion and $2.86 billion respectively. Franklin Resources boosted its holding by 23.5% (adding 5.14 million shares) and Fisher Asset Management added 567,900 shares, bringing institutional ownership to 76.07%.

Merck reported fourth-quarter adjusted earnings per share of $1.94, missing consensus estimates by $0.14, but maintained strong profitability metrics with a 44.5% return on equity and a 29.6% net margin. On the capital returns front, the company declared a quarterly dividend of $0.85 per share—up from $0.81—equating to an annualized payout of $3.40 and a 3.1% yield. Management’s dividend payout ratio stands at 44.9%, underscoring a balanced approach to shareholder distributions alongside ongoing investments in its drug pipeline.

Equity research remains mixed: eight firms rate Merck shares as Buy, seven as Hold and two as Sell, yielding a consensus Hold rating. Price targets have been revised higher across the board—from mid-$90s to low-$130s—following steady performance of flagship products such as Keytruda and Gardasil. Notable upgrades include BMO Capital Markets raising its rating to Outperform with a $130 target and Wolfe Research setting a $135 target after elevating its peer comparison. Analysts highlight robust cash flow generation and late-stage pipeline catalysts, tempered by patent expirations and competitive pressures in key therapeutic areas.