RBC Capital Sets $142 Target as Merck Plans Oncology Split and $10B Pipeline Push
RBC Capital launched coverage of Merck with an Outperform rating and $142 target, forecasting a growth rebound in early 2030s from new product launches and Phase 3 data. Merck plans to split into oncology and non-oncology units after tripling R&D programs since 2021 and investing $10B in pipeline deals.
1. RBC Capital Coverage
RBC Capital initiated coverage of Merck with an Outperform rating and a $142 price target, diverging from consensus that foresees an extended decline. The firm cited upcoming product launches, Phase 3 trial readouts and management’s track record as catalysts for a growth rebound in the early 2030s.
2. Business Reorganization
Merck announced plans to reorganize into two standalone divisions: one focused on its oncology portfolio led by Keytruda and another covering non-oncology treatments. The split is designed to reduce reliance on Keytruda as its patent expires in late 2028 and to streamline strategic focus across therapeutic areas.
3. Pipeline Expansion and Acquisitions
Since 2021, Merck has tripled the number of R&D programs in development and strengthened its pipeline through the combined $10 billion acquisitions of Cidara Therapeutics and Verona Pharma. These moves aim to diversify revenue streams and position the company for sustained long-term growth.