We came across a bullish thesis on Merck & Co., Inc. on R. Dennis’s Substack’s Substack by OppCost. In this article, we will summarize the bulls’ thesis on MRK. Merck & Co., Inc.’s share was trading at $106.90 as of January 28th. MRK’s trailing and forward P/E were 14.28 and 17.27 respectively according to Yahoo Finance.
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Merck & Co., Inc. operates as a healthcare company worldwide. MRK has emerged as the focus of a high-conviction bullish thesis following the detection of an unusually large institutional options trade on December 8, 2025, when a sophisticated market participant purchased 30,000 April 17, 2026 $110 call contracts, representing roughly $300 million in notional exposure. This trade, executed as MRK retraced precisely to its 21-day exponential moving average, signals a deliberate and well-timed bet on a medium-term repricing rather than a short-term speculative move.
The choice of the April 2026 expiration aligns with multiple anticipated catalysts, including FY2025 earnings, early 2026 pipeline updates, and increasing visibility into Merck’s post-Keytruda growth trajectory. To optimize capital efficiency, the thesis proposes a split-strike risk reversal, selling April $85 puts to finance the $110 calls, anchoring downside risk to the 200-day simple moving average, a level widely viewed as a structural accumulation zone for a high-quality defensive name like Merck.
Fundamentally, confidence is underpinned by the accelerating launch of Winrevair, which is already tracking toward blockbuster status, the continued durability and lifecycle extension of the Keytruda franchise, and a deepening pipeline that includes promising assets in cardiology, vaccines, and respiratory disease.
These drivers coincide with a broader macro rotation into healthcare defensives, where Merck trades at a valuation discount while offering a strong dividend yield that reinforces a downside floor. Even absent multiple expansion, the structure offers limited downside with uncapped upside, while a successful fundamental rerating could propel MRK well beyond the $110 strike, delivering an asymmetric and compelling risk/reward profile.
Previously, we covered a bullish thesis on Merck & Co., Inc. (MRK) by Charly AI in April 2025, which highlighted improving margins, strong free cash flow generation, and durable growth from oncology and cardiovascular franchises. MRK’s stock price has appreciated by approximately 30.50% since our coverage due to earnings momentum and pipeline execution. OppCost shares a similar view but emphasizes institutional options activity and technical positioning.
Disclaimer : This story is auto aggregated by a computer programme and has not been created or edited by DOWNTHENEWS. Publisher: finance.yahoo.com
