10 Most Undervalued High Quality Stocks to Buy According to Analysts

6. Merck & Co., Inc. (NYSE:MRK)

Forward P/E Ratio: 10.3 

Number of Hedge Fund Holders: 91

Analyst Upside Potential: 23.40%

Merck & Co., Inc. (NYSE:MRK) is a major pharmaceutical company that specializes in developing medicines for both humans and animals. The company is known for its KEYTRUDA treatment, where it continues to make significant investments to increase its lifecycle and market dominance.

On February 24, analyst Nico Chen from DBS maintained a Buy rating on the stock with a price target of $100. The analyst noted that Keytruda is Merck & Co., Inc. (NYSE:MRK)’s flagship oncology drug and has been a significant revenue driver for the company. Its sales have grown substantially, solidifying Merck’s position as a leader in the oncology market. Keytruda continues to expand its global presence, contributing significantly to Merck’s revenue. Moreover, Chen highlighted that the development of sac-TMT, an antibody-drug conjugate for treating advanced non-small cell lung cancer, has received Breakthrough Therapy Designation from the US FDA. This designation could accelerate its market entry, potentially boosting Merck’s share price. The financial prospects are robust, with expectations of accelerated net income growth. It is one of the most undervalued high-quality stocks to buy according to analysts.

GreensKeeper Asset Management stated the following regarding Merck & Co., Inc. (NYSE:MRK) in its Q3 2024 investor letter:

“Merck & Co., Inc. (NYSE:MRK) was our second-largest detractor this quarter, declining -8.3%. MRK’s leading HPV vaccine, GARDASIL 9, faced challenges internationally due to inventory buildup within its Chinese distributor, which is expected to reduce shipments for the remainder of 2024. Despite this short-term impact, the long-term outlook for GARDASIL 9 remains promising. Meanwhile, the company’s $27 billion Keytruda cancer juggernaut continues to grow at a healthy clip, powering earnings growth.”