(CercleFinance.com) – Bank of America downgraded its recommendation on Merck KGaA on Tuesday, which it reduced to ‘neutral’ against ‘purchase’ previously, citing valuation issues in particular.
The American broker – which retains its price target of 155 euros – explains that after an outperformance of around 45% compared to the rest of the European pharmaceutical sector since mid-2020, the stock now displays a premium of 25% in terms of PER.
Another argument put forward by the broker, the prospect of a loss of exclusivity on Mavenclad, the treatment against multiple sclerosis of the German group, which could occur according to him as early as 2026 or 2027.
BofA also puts forward a ‘pipeline’ target considered ambitious, Merck valuing its projects under development at around two billion euros by 2022, while the consensus is more cautious, simply targeting 1.6 billion.
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