BMO cuts rating on Merck and Biogen, on lack of near term catalyst

Investing.com — BMO Capital Markets downgraded Merck & Company Inc (NYSE:) to “market perform” from “outperform,” citing concerns over its Gardasil franchise in China and uncertainty around filling the revenue gap as Keytruda faces loss of exclusivity and biosimilar competition.

The brokerage lowered its price target on Merck (NS:) to $105 and flagged a lack of near-term catalysts, suggesting the stock may remain range-bound over the next year.

BMO noted that the recent sell-off in Merck shares reflects growing skepticism in the pharmaceutical sector, with investors seeking more stable options. It added that while Merck has made progress in addressing post-2028 challenges, further clarity is needed to regain confidence.

Additionally, brokerage also downgraded Biogen Inc (NASDAQ:) to “market perform” from “outperform,” on slower-than-expected revenue growth for Alzheimer’s drug Leqembi, erosion in its multiple sclerosis business, and weaker growth in its rare disease portfolio.

The brokerage cut its price target for Biogen to $164, noting limited near-term opportunities for high-value catalysts as the company works to address these challenges.

BMO noted management’s efforts to turn the business around, but it sees little upside for the stock in the near term as these issues are resolved.