We came across a bullish thesis on Merck & Co., Inc. (MRK) on Substack by Investing Intel. In this article, we will summarize the bulls’ thesis on MRK. Merck & Co., Inc. (MRK)’s share was trading at $84.71 as of April 29th. MRK’s trailing and forward P/E were 12.31 and 9.45 respectively according to Yahoo Finance.
A closeup of pills in a pharmacy, representing the high quality medications of the company.
Merck’s $3.9 billion acquisition of SpringWorks Therapeutics marks its largest deal since 2019 and reflects a strategic move to fortify its healthcare division ahead of looming patent expirations. Paying $47 per share in cash—a 26% premium—Merck secures two U.S.-approved treatments and a high-potential pipeline, positioning itself for long-term growth. The acquisition is expected to begin contributing to earnings in 2027 and could generate up to $1.6 billion in annual revenue by 2030, adding a valuable and scalable revenue stream. This deal underscores Merck’s commitment to expanding through high-impact acquisitions and sends a strong signal to the market about its proactive approach to building its future product portfolio. With the acquisition funded through a mix of cash and new debt, Merck is demonstrating its willingness to deploy capital to offset future revenue headwinds while maintaining financial flexibility. The transaction is also a reflection of the broader trend of large pharmaceutical companies acquiring innovative biotech firms to supplement their pipelines amid rising competition and expiring patents. For investors, the deal not only delivers an immediate premium to SpringWorks shareholders but also enhances Merck’s longer-term growth profile, diversifies its portfolio, and provides additional upside through potential blockbuster drug development. As the company continues to evaluate further strategic deals, this acquisition illustrates Merck’s evolving strategy in staying competitive and forward-looking in a rapidly changing pharmaceutical landscape.
Merck & Co., Inc. (MRK) is not on our list of the 30 Most Popular Stocks Among Hedge Funds. As per our database, 91 hedge fund portfolios held MRK at the end of the fourth quarter which was 86 in the previous quarter. While we acknowledge the risk and potential of MRK as an investment, our conviction lies in the belief that some AI stocks hold greater promise for delivering higher returns, and doing so within a shorter timeframe. If you are looking for an AI stock that is more promising than MRK but that trades at less than 5 times its earnings, check out our report about the cheapest AI stock.
