Merck shares jumped 2% Friday after Deutsche Bank analyst James Shin upgraded the pharmaceutical giant to Buy with a $150 price target, suggesting 26% upside from Thursday's close. The upgrade comes despite looming Keytruda patent expiration concerns that have weighed on the stock.

Shin's analysis draws parallels to AbbVie's successful navigation of Humira's patent cliff, projecting Merck's trough earnings at $11 per share versus Street consensus of $10. The analyst believes Merck already has visibility to low-single-digit terminal revenue growth excluding Keytruda, with a pipeline strengthened by acquisitions including Winrevair, Ohtuvayre, and CDTX that could generate over $35 billion in risk-adjusted revenue by 2035.

Deutsche Bank's assessment suggests the market is undervaluing Merck, similar to how investors eventually recognized AbbVie's resilience. With Keytruda's patent cliff approaching, the pharmaceutical giant's ability to execute on its pipeline strategy could determine whether it follows the path of other successful patent cliff navigators. The upgrade reflects confidence that Merck can transition beyond its flagship drug while maintaining growth momentum.