Power-Alley: I Think Citi's Pessimism... On Merck's Pipeline Is... Overwrought. Once Again -- As In 2016.

From ~$82.40, down to ~$75.05 on the NYSE this morning, just since late last week -- November 24, 2021. . . seems a bit of an over-correction. As I said over the long weekend, Merck's COVID pill molnupiravir (soon to be branded as Lagevrio^®) will do fine -- and if it is true that the Omicron variant, while more contagious. . . is less lethal, the drug will likely see wide use to shorten / avoid hospital stays -- and be seen as very effective, since its approach should cover all variants (as should Pfizer's, given the similar approaches).

[Still, Citi sees Merck's 12 month price target. . . at $85. And in mid-2016, five years ago, the same firm had the target at $65 -- with a neutral rating as well (while worrying about the as then yet unapproved by US FDA pembrolizumab -- which turned out fine, now five years on).]

So -- over the longer haul, I see little risk of a crater, even if Keytruda^® eventually goes generic, in about a decade or so. The COVID viruses. . . will be with us, and thus the vaccines and therapeutic drugs will be in high demand -- for most of the next decade, I would bet. In any event, here's a bit -- in fairness:

. . .Noting that the firm’s long-run thesis on the company was based on an undervalued pipeline with islatravir expected to overcome the loss of exclusivity of cancer drug Keytruda, the analysts have lowered the per-share earnings target by up to 10%. . . .

So -- as a Condor's "power alley" opinion^® [Hah!], I would expect that the stock will return to above $80 a share, well before year end. Onward, smiling. . . into a gray but warming morning here.

नमस्ते