Why Merck Stock Is Slipping Today
Shares of Merck & Co. (NYSE: MRK) were trading 5.5% lower as of 12:46 p.m. ET on Monday. The decline came after Citi analyst Andrew Baum downgraded the stock from buy to neutral, and lowered his 12-month price target on it from $105 to $85.
Should investors automatically accept what Wall Street analysts think about a given stock? No. However, it is wise to understand why analysts change their perspectives. In this case, Baum's downgrade decision was driven by a pair of significant disappointments that Merck reported in recent weeks.
On Nov. 18, Merck announced that it was pausing the development of its candidate dubbed MK-8507. The company also suspended dosing in a phase 2 study evaluating the investigational drug in combination with islatravir in treating HIV. This led to concerns that Merck could end up throwing in the towel on islatravir.
Source Fool.com
