Merck & Co. Inc.

Merck shares digest trial win and dividend lift as analysts recalibrate forecasts

Merck’s stock moved this week after the company reported positive Phase 3 data for a Keytruda combination and announced a higher quarterly dividend, prompting analysts to update models and investors to reassess near-term cash flow and oncology growth prospects. Market reaction reflects the twin implications: stronger evidence that Keytruda combinations can extend franchise revenue, and a shareholder-return signal that management is confident in cash generation amid later-patent risks.

• Phase 3 KEYNOTE-905 results released this week showed positive data for Keytruda (pembrolizumab) combined with enfortumab vedotin in a new oncology indication, which supports Keytruda’s long-term revenue potential by expanding approved combination uses and reducing near-term clinical risk for the franchise.
• Merck raised its quarterly dividend to $0.85 (annualized $3.40), announced with an ex-dividend date this week, which tightened the stock’s income appeal and suggested management confidence in free cash flow despite looming Keytruda patent expiry later this decade.
• Several sell- and buy-side analysts updated coverage and price targets in the last few days, lifting some targets and widening forecast ranges — the revisions reflect mixed implications: upside from new trial momentum and dividend support versus longer-term margin pressure as Keytruda faces patent cliffs and biosimilar competition.