NEW YORK (TheStreet) -- Shares of Merck (MRK) - Get Merck & Co., Inc. (MRK) Report were advancing in pre-market trading on Thursday after Bank of America/Merrill Lynch raised its rating on the stock to "buy" from "neutral."
The firm increased its price target to $70 from $57 on shares of the Kenilworth, NJ-based pharmaceutical company.
Merck's lung cancer treatment Keytruda will likely receive early approval and "become the standard of care in the labelled indication, which will drive continued upward revisions of estimates," BofA/Merrill Lynch claimed.
The firm also sees further upside in first-line lung cancer from the Keytruda-chemo combination, and believes that Keytruda's market share in second-line lung cancer will "increase significantly" due to first-line approval.
Beyond oncology, Merck could benefit from possible positive data in December from Eli Lilly's (LLY) Alzheimer's drug, BofA/Merrill Lynch added.
Separately, TheStreet Ratings team rates the stock as a "buy" with a ratings score of A-.
Merck's strengths such as its increase in net income, revenue growth, largely solid financial position with reasonable debt levels by most measures, expanding profit margins and solid stock price performance outweigh the fact that the company shows weak operating cash flow.
You can view the full analysis from the report here: MRK
TheStreet Ratings objectively rated this stock according to its "risk-adjusted" total return prospect over a 12-month investment horizon. Not based on the news in any given day, the rating may differ from Jim Cramer's view or that of this article's author.