Not just Moderna: Morgan Stanley predicts Merck stock will soar
While Moderna grabbed headlines with a 177% jump, its partner Merck recorded its best day since 2009. Morgan Stanley has upgraded its recommendation, highlighting the company's potential beyond its flagship drug, despite the looming patent expiration.
Merck, the American pharmaceutical giant behind Keytruda, surged by about 13%, marking its strongest trading day since March 2009. The rally was driven by the same report that sent Moderna soaring: positive results in the advanced phase trial of a personalized melanoma vaccine, which the two companies are developing together. However, while Moderna nearly tripled its value in a single day, the move in Merck was far more moderate, making it a fundamentally different investment story.
The explanation lies in scale. Merck entered trading with a market capitalization of approximately $333 billion, thirteen times that of Moderna. For a company of this size, even a significant trial success does not dramatically alter the overall picture, as it relies on a broad portfolio and a drug that already generates massive profits.
Keytruda, Merck's immunotherapy drug, is the world's best-selling medication, recording over $16 billion in sales in the first half of 2026 alone. Since the beginning of the year, Merck's stock has risen by about 45% on the back of a series of positive trial results.
The main cloud over Merck is a specific date: the end of 2028. This is when the primary US patent for Keytruda is expected to expire, opening the door to generic competition and the erosion of the company's largest revenue stream. Investors are questioning whether the company can grow beyond this "cliff."
Morgan Stanley, which upgraded the stock from "equal-weight" to "overweight," believes it can. The bank raised its target price to $179 from $116, reflecting a growth potential of about 17% relative to the price at the time of the report's publication.
Analyst Terence Flynn explained in a note to clients that the key lies in the product pipeline beyond Keytruda. "We believe that the optionality in the product pipeline—including antismeran autogen and sac-TMT in oncology, and tolisukibart in inflammatory bowel disease—may allow Merck to grow beyond the Keytruda cliff," he wrote.
Furthermore, Merck may develop combined formulations of Keytruda to extend the brand's lifespan and soften the impact of the patent expiration. Flynn added that he sees "room for multiple expansion as the pipeline de-risks and new products hit the market." The upgrade aligns with Wall Street consensus: out of 32 analysts covering Merck, 24 recommend "buy" or "strong buy."
For those considering exposure to this saga, the difference between the two stocks is a matter of risk profile. Moderna has already made a massive jump, and its current valuation reflects aggressive expectations that the vaccine will work against other cancers—implying high potential alongside sharp volatility.
Merck, by contrast, is a more conservative bet: a profitable, established company with stable dividends and a diversified portfolio, where the main risk (the 2028 patent expiration) is known and priced in. Those seeking exposure to the "vaccine story" with less drama may find Merck a calmer alternative, though it is important to remember that no analyst recommendation is a guarantee, and the patent scenario remains a background factor.
