3. Merck & Co. Inc. (NYSE:MRK)
Merck & Co., Inc. (NYSE: MRK) claims the No. 3 position, supported by one of the world’s most valuable cancer franchises and a growing effort to diversify beyond it.
The center of the Merck & Co., Inc. (NYSE: MRK) story remains Keytruda.
Few drugs have reshaped modern oncology as dramatically. The cancer immunotherapy has become an enormous commercial success across multiple tumor types and a critical component of the company’s earnings power.
CFRA analyst Sel Hardy projects Keytruda could generate approximately $33 billion in full-year sales in 2026, highlighting the staggering scale of the franchise.
To put that into perspective, a single pharmaceutical product generating tens of billions of dollars annually would produce more revenue than many publicly traded companies generate across their entire operations.
Keytruda is not standing still, either.
The recent European approval of the Keytruda-Padcev combination could significantly expand the addressable market and provide another commercial catalyst. Combination therapies are particularly important in oncology because cancer treatment increasingly involves using multiple mechanisms together rather than depending on one medicine in isolation.
But Merck & Co., Inc. (NYSE: MRK) also understands the danger of becoming too dependent on one blockbuster.
That is where acquisitions become important.
The acquisitions of Cidara Therapeutics and Terns Pharmaceuticals are expected to strengthen the company’s portfolio and provide greater diversification beyond Keytruda. Merck & Co., Inc. (NYSE: MRK) is also collaborating with Daiichi Sankyo, providing another potential avenue for growth.
The strategy matters because pharmaceutical investors frequently start worrying about patent expirations years before the actual loss of exclusivity occurs. Wall Street is forward-looking, and a company with a dominant blockbuster eventually has to prove it can build the next generation of products before the current franchise matures.
Merck & Co., Inc. (NYSE: MRK) is attempting to do exactly that.
CFRA has gone a step further with this stock than with most companies on the list, assigning Merck & Co., Inc. (NYSE: MRK) a “strong buy” rating and a $149 price target. Against the July 30 closing price of $129.79, that represents roughly 15% potential upside.
For investors looking for undervalued pharmaceutical stocks, oncology stocks and blue-chip healthcare stocks, Merck & Co., Inc. (NYSE: MRK) presents an interesting proposition.
The company already owns one of the strongest franchises in global oncology. The challenge is proving that Keytruda is not the final chapter.
Strategic acquisitions, international expansion, combination therapies and pipeline development suggest management is already working aggressively on the answer.
