Merck (MRK)
Market Price (7/24/2026): $130.19 | Market Cap: $321.8 BilInvestor Relations Sector: Health Care | Industry: Pharmaceuticals
Merck (MRK)
Market Price (7/24/2026): $130.19Market Cap: $321.8 BilSector: Health CareIndustry: Pharmaceuticals
Investment Highlights Why It Matters Detailed financial logic regarding cash flow yields vs trend-riding momentum.
Attractive yieldTotal YieldTotal Yield = Earnings Yield + Dividend Yield, Earnings Yield = Net Income / Market Cap Dividend Yield = Total Dividends / Market Cap is 5.3%, Dividend Yield is 2.6% Attractive cash flow generationCFO/Rev LTMCash Flow from Operations / Revenue (Sales), Last Twelve Months (LTM) is 27%, FCF/Rev LTMFree Cash Flow / Revenue (Sales), Last Twelve Months (LTM) is 21%, CFO LTM is 18 Bil, FCF LTM is 14 Bil Stock buyback supportStock Buyback 3Y Total is 8.5 Bil Low stock price volatilityVol 12M is 28% Megatrend and thematic driversMegatrends include Biotechnology & Genomics, Precision Medicine, and Aging Population & Chronic Disease. Themes include Biopharmaceutical R&D, Show more. | Trading close to highsDist 52W High is 0.0%, Dist 3Y High is 0.0% | Expensive valuation multiplesP/EBITPrice/EBIT or Price/(Operating Income) ratio is 25x, P/EPrice/Earnings or Price/(Net Income) is 36x Key risksMRK key risks include [1] the impending 2028 patent expiration of its blockbuster drug, Show more. |
| Attractive yieldTotal YieldTotal Yield = Earnings Yield + Dividend Yield, Earnings Yield = Net Income / Market Cap Dividend Yield = Total Dividends / Market Cap is 5.3%, Dividend Yield is 2.6% |
| Attractive cash flow generationCFO/Rev LTMCash Flow from Operations / Revenue (Sales), Last Twelve Months (LTM) is 27%, FCF/Rev LTMFree Cash Flow / Revenue (Sales), Last Twelve Months (LTM) is 21%, CFO LTM is 18 Bil, FCF LTM is 14 Bil |
| Stock buyback supportStock Buyback 3Y Total is 8.5 Bil |
| Low stock price volatilityVol 12M is 28% |
| Megatrend and thematic driversMegatrends include Biotechnology & Genomics, Precision Medicine, and Aging Population & Chronic Disease. Themes include Biopharmaceutical R&D, Show more. |
| Trading close to highsDist 52W High is 0.0%, Dist 3Y High is 0.0% |
| Expensive valuation multiplesP/EBITPrice/EBIT or Price/(Operating Income) ratio is 25x, P/EPrice/Earnings or Price/(Net Income) is 36x |
| Key risksMRK key risks include [1] the impending 2028 patent expiration of its blockbuster drug, Show more. |
Qualitative Assessment
AI Analysis | Feedback
Merck (MRK) stock has gained about 10% since 3/31/2026 because of the following key factors:
1. Strong Fiscal Q1 2026 Financial Performance and Upgraded Full-Year Outlook.
Merck announced better-than-expected fiscal Q1 2026 results on April 30, 2026, with worldwide sales reaching $16.3 billion, a 5% increase year-over-year, surpassing analyst estimates of $15.82 billion. The company also narrowed and raised its full-year 2026 sales guidance to between $65.8 billion and $67.0 billion and non-GAAP EPS guidance to between $5.04 and $5.16, indicating confidence in future growth despite a one-time $9.0 billion charge related to the Cidara acquisition that resulted in a GAAP loss per share of $1.72.
2. Robust Sales Growth of Key Oncology and Cardio-Pulmonary Products.
The company's flagship oncology product, KEYTRUDA, along with its subcutaneous formulation KEYTRUDA QLEX, continued to demonstrate strong performance, achieving $8.0 billion in combined sales in fiscal Q1 2026, an 8% increase (excluding foreign exchange) year-over-year. Additionally, WINREVAIR, a cardio-pulmonary product, posted significant growth with sales of $525 million, an 87% increase (excluding foreign exchange) in fiscal Q1 2026.
Show more
Merck (MRK) stock has gained about 10% since 3/31/2026 because of the following key factors:
1. Strong Fiscal Q1 2026 Financial Performance and Upgraded Full-Year Outlook.
Merck announced better-than-expected fiscal Q1 2026 results on April 30, 2026, with worldwide sales reaching $16.3 billion, a 5% increase year-over-year, surpassing analyst estimates of $15.82 billion. The company also narrowed and raised its full-year 2026 sales guidance to between $65.8 billion and $67.0 billion and non-GAAP EPS guidance to between $5.04 and $5.16, indicating confidence in future growth despite a one-time $9.0 billion charge related to the Cidara acquisition that resulted in a GAAP loss per share of $1.72.
2. Robust Sales Growth of Key Oncology and Cardio-Pulmonary Products.
The company's flagship oncology product, KEYTRUDA, along with its subcutaneous formulation KEYTRUDA QLEX, continued to demonstrate strong performance, achieving $8.0 billion in combined sales in fiscal Q1 2026, an 8% increase (excluding foreign exchange) year-over-year. Additionally, WINREVAIR, a cardio-pulmonary product, posted significant growth with sales of $525 million, an 87% increase (excluding foreign exchange) in fiscal Q1 2026.
3. Advancements in Pipeline and Regulatory Approvals.
Merck secured several significant regulatory approvals and presented positive clinical trial data, enhancing its pipeline prospects. This included the FDA approval in April 2026 for IDVYNSO, a new once-daily HIV-1 treatment. Furthermore, positive Phase 3 results for KEYTRUDA plus Padcev in muscle-invasive bladder cancer and for tulisokibart in ulcerative colitis were reported in April and June 2026, respectively, signaling future growth drivers beyond its established portfolio.
4. Strategic Pipeline Expansion through Acquisition.
In April 2026, Merck announced the planned acquisition of Terns Pharmaceuticals, Inc., expected to close in May 2026. This acquisition is poised to bolster Merck's hematology pipeline with TERN-701, a novel candidate for Chronic Myeloid Leukemia, demonstrating Merck's proactive approach to diversifying its future revenue streams.
Show less
Stock Movement Drivers
Fundamental Drivers
The 9.3% change in MRK stock from 3/31/2026 to 7/23/2026 was primarily driven by a 122.4% change in the company's P/E Multiple.| (LTM values as of) | 3312026 | 7232026 | Change |
|---|---|---|---|
| Stock Price ($) | 119.43 | 130.48 | 9.3% |
| Change Contribution By: | |||
| Total Revenues ($ Mil) | 65,011 | 65,768 | 1.2% |
| Net Income Margin (%) | 28.1% | 13.6% | -51.6% |
| P/E Multiple | 16.2 | 36.1 | 122.4% |
| Shares Outstanding (Mil) | 2,481 | 2,472 | 0.4% |
| Cumulative Contribution | 9.3% |
Market Drivers
3/31/2026 to 7/23/2026| Return | Correlation | |
|---|---|---|
| MRK | 9.3% | |
| Market (SPY) | 13.5% | -7.1% |
| Sector (XLV) | 10.1% | 70.1% |
Fundamental Drivers
The 25.8% change in MRK stock from 12/31/2025 to 7/23/2026 was primarily driven by a 165.5% change in the company's P/E Multiple.| (LTM values as of) | 12312025 | 7232026 | Change |
|---|---|---|---|
| Stock Price ($) | 103.74 | 130.48 | 25.8% |
| Change Contribution By: | |||
| Total Revenues ($ Mil) | 64,235 | 65,768 | 2.4% |
| Net Income Margin (%) | 29.6% | 13.6% | -54.2% |
| P/E Multiple | 13.6 | 36.1 | 165.5% |
| Shares Outstanding (Mil) | 2,495 | 2,472 | 0.9% |
| Cumulative Contribution | 25.8% |
Market Drivers
12/31/2025 to 7/23/2026| Return | Correlation | |
|---|---|---|
| MRK | 25.8% | |
| Market (SPY) | 8.5% | 1.3% |
| Sector (XLV) | 4.7% | 64.7% |
Fundamental Drivers
The 70.3% change in MRK stock from 6/30/2025 to 7/23/2026 was primarily driven by a 225.7% change in the company's P/E Multiple.| (LTM values as of) | 6302025 | 7232026 | Change |
|---|---|---|---|
| Stock Price ($) | 76.60 | 130.48 | 70.3% |
| Change Contribution By: | |||
| Total Revenues ($ Mil) | 63,922 | 65,768 | 2.9% |
| Net Income Margin (%) | 27.3% | 13.6% | -50.2% |
| P/E Multiple | 11.1 | 36.1 | 225.7% |
| Shares Outstanding (Mil) | 2,523 | 2,472 | 2.1% |
| Cumulative Contribution | 70.3% |
Market Drivers
6/30/2025 to 7/23/2026| Return | Correlation | |
|---|---|---|
| MRK | 70.3% | |
| Market (SPY) | 20.5% | 6.9% |
| Sector (XLV) | 21.3% | 70.6% |
Fundamental Drivers
The 24.0% change in MRK stock from 6/30/2023 to 7/23/2026 was primarily driven by a 76.2% change in the company's P/E Multiple.| (LTM values as of) | 6302023 | 7232026 | Change |
|---|---|---|---|
| Stock Price ($) | 105.21 | 130.48 | 24.0% |
| Change Contribution By: | |||
| Total Revenues ($ Mil) | 57,869 | 65,768 | 13.6% |
| Net Income Margin (%) | 22.5% | 13.6% | -39.7% |
| P/E Multiple | 20.5 | 36.1 | 76.2% |
| Shares Outstanding (Mil) | 2,538 | 2,472 | 2.7% |
| Cumulative Contribution | 24.0% |
Market Drivers
6/30/2023 to 7/23/2026| Return | Correlation | |
|---|---|---|
| MRK | 24.0% | |
| Market (SPY) | 72.4% | 17.3% |
| Sector (XLV) | 27.3% | 61.7% |
Price Returns Compared
| 2021 | 2022 | 2023 | 2024 | 2025 | 2026 | Total [1] | |
|---|---|---|---|---|---|---|---|
| Returns | |||||||
| MRK Return | 2% | 49% | 1% | -6% | 10% | 23% | 94% |
| Peers Return | 36% | 15% | -3% | 12% | 24% | 13% | 138% |
| S&P 500 Return | 27% | -19% | 24% | 23% | 16% | 10% | 100% |
Monthly Win Rates [3] | |||||||
| MRK Win Rate | 42% | 67% | 42% | 33% | 50% | 57% | |
| Peers Win Rate | 62% | 63% | 40% | 53% | 62% | 60% | |
| S&P 500 Win Rate | 75% | 42% | 67% | 75% | 67% | 43% | |
Max Drawdowns [4] | |||||||
| MRK Max Drawdown | -20% | -11% | -14% | -27% | -27% | -11% | |
| Peers Max Drawdown | -17% | -19% | -26% | -20% | -23% | -16% | |
| S&P 500 Max Drawdown | -5% | -25% | -10% | -8% | -19% | -9% | |
[1] Cumulative total returns since the beginning of 2021
[2] Peers: PFE, JNJ, LLY, ABBV, BMY. See MRK Returns vs. Peers.
[3] Win Rate = % of calendar months in which monthly returns were positive
[4] Max drawdown represents maximum peak-to-trough decline within a year
[5] 2026 data is for the year up to 7/23/2026 (YTD)
How Low Can It Go
| Event | MRK | S&P 500 |
|---|---|---|
| 2025 US Tariff Shock | ||
| % Loss | -13.4% | -18.8% |
| % Gain to Breakeven | 15.5% | 23.1% |
| Time to Breakeven | 71 days | 79 days |
| 2024 Yen Carry Trade Unwind | ||
| % Loss | -12.7% | -7.8% |
| % Gain to Breakeven | 14.5% | 8.5% |
| Time to Breakeven | 549 days | 18 days |
| 2020 COVID-19 Crash | ||
| % Loss | -18.4% | -33.7% |
| % Gain to Breakeven | 22.5% | 50.9% |
| Time to Breakeven | 16 days | 140 days |
| 2015-2016 China Devaluation / Global Growth Scare | ||
| % Loss | -18.2% | -12.2% |
| % Gain to Breakeven | 22.3% | 13.9% |
| Time to Breakeven | 277 days | 62 days |
| 2014-2016 Oil Price Collapse | ||
| % Loss | -16.2% | -6.8% |
| % Gain to Breakeven | 19.4% | 7.3% |
| Time to Breakeven | 204 days | 15 days |
| 2011 US Debt Ceiling Crisis & European Contagion | ||
| % Loss | -17.4% | -17.9% |
| % Gain to Breakeven | 21.1% | 21.8% |
| Time to Breakeven | 93 days | 123 days |
In The Past
Merck's stock fell -13.4% during the 2025 US Tariff Shock. Such a loss loss requires a 15.5% gain to breakeven.
Preserve Wealth
Limiting losses and compounding gains is essential to preserving wealth.
Asset Allocation
Actively managed asset allocation strategies protect wealth. Learn more.
| Event | MRK | S&P 500 |
|---|---|---|
| 2008-2009 Global Financial Crisis | ||
| % Loss | -62.5% | -53.4% |
| % Gain to Breakeven | 166.4% | 114.4% |
| Time to Breakeven | 1319 days | 1085 days |
In The Past
Merck's stock fell -13.4% during the 2025 US Tariff Shock. Such a loss loss requires a 15.5% gain to breakeven.
Preserve Wealth
Limiting losses and compounding gains is essential to preserving wealth.
Asset Allocation
Actively managed asset allocation strategies protect wealth. Learn more.
About Merck (MRK)
Merck & Co., Inc. (MRK) operates as a global healthcare company, dedicated to improving health for both humans and animals. Its business is strategically divided into two primary segments: Pharmaceutical and Animal Health. This structure allows Merck to develop and deliver a comprehensive range of health solutions worldwide, underpinned by extensive research and manufacturing capabilities.
The Pharmaceutical segment focuses on human health, offering a robust portfolio of prescription medicines and vaccines. Its key product areas include oncology, immunology, neuroscience, virology, cardiovascular, diabetes, and hospital acute care, alongside vital preventive vaccines for all age groups. Merck distributes these products to a wide array of customers, including drug wholesalers and retailers, hospitals, government agencies, managed health care providers, and directly to physicians.
Complementing its human health focus, Merck's Animal Health segment provides innovative veterinary pharmaceuticals, vaccines, and health management solutions. This segment also develops advanced digitally connected products for animal identification, traceability, and monitoring. By serving veterinarians and animal producers globally, Merck contributes to animal well-being and livestock productivity.
AI Analysis | Feedback
Here are 1-3 brief analogies for Merck (MRK):
- Like Pfizer, but with a significant focus on animal health in addition to human pharmaceuticals.
- Similar to the pharmaceutical and vaccine divisions of Johnson & Johnson, plus a major animal health business.
AI Analysis | Feedback
- Human Pharmaceutical Products: Merck develops and markets pharmaceutical drugs targeting various human diseases, including oncology, hospital acute care, immunology, neuroscience, virology, cardiovascular, and diabetes.
- Human Vaccine Products: The company offers a range of vaccine products for the prevention of diseases in pediatric, adolescent, and adult populations.
- Veterinary Pharmaceutical Products: Merck discovers, develops, manufactures, and markets medicinal pharmaceuticals for animal health.
- Animal Vaccines: The company provides vaccines specifically designed to protect animals from various diseases.
- Animal Health Management Solutions and Services: Merck offers health management solutions and services aimed at improving the overall well-being and productivity of animals.
- Digitally Connected Animal Identification & Monitoring Products: The company provides digital products for the identification, traceability, and monitoring of animals.
AI Analysis | Feedback
Merck (MRK) primarily sells its products to other companies and organizations rather than directly to individuals. Based on the company description, its major customers are intermediaries and healthcare providers. While specific customer names are not provided in the background, the following public companies represent typical major customers within the described categories:
Drug Wholesalers
These companies act as major distributors of pharmaceutical products from manufacturers like Merck to pharmacies, hospitals, and other healthcare providers.
- McKesson Corporation (MCK)
- AmerisourceBergen Corporation (ABC)
- Cardinal Health, Inc. (CAH)
Retail Pharmacies
Large pharmacy chains are significant purchasers and distributors of Merck's pharmaceutical products to the end consumer.
- CVS Health Corporation (CVS)
- Walgreens Boots Alliance, Inc. (WBA)
Managed Health Care Providers and Pharmacy Benefit Managers (PBMs)
These organizations manage healthcare plans and prescription drug benefits for large populations, influencing drug purchasing and formularies.
- UnitedHealth Group Inc. (UNH)
- The Cigna Group (CI)
- Elevance Health, Inc. (ELV)
Hospital Systems
Large hospital networks directly procure a range of pharmaceutical products for patient care.
- HCA Healthcare, Inc. (HCA)
AI Analysis | Feedback
AI Analysis | Feedback
Robert M. Davis, Chairman and Chief Executive Officer
Robert M. Davis is the Chairman of the Board and Chief Executive Officer of Merck & Co., Inc.. He joined Merck in 2014 as the Chief Financial Officer, with additional responsibilities for real estate operations, corporate strategy, and business development. In 2016, his role expanded to include information technology and procurement, forming Global Services. He became President in April 2021, and then CEO and a member of the board of directors on July 1, 2021. Prior to joining Merck, Mr. Davis was corporate vice president and president of Baxter’s medical products business. During his time at Baxter, he also held positions such as president of Baxter's renal business, chief financial officer, and treasurer. Before his tenure at Baxter, he spent 14 years at Eli Lilly and Company in various roles of increasing responsibility, including Director of Corporate Financial Planning.
Caroline Litchfield, Executive Vice President and Chief Financial Officer
Caroline Litchfield serves as the Executive Vice President and Chief Financial Officer for Merck, overseeing the company's finance, procurement, and real estate operations. She began her career at Merck in 1990 within its U.K. business and has since held numerous positions of increasing responsibility in country, regional, and global finance functions. Ms. Litchfield previously served as the company's treasurer, responsible for treasury, tax, and investor relations. From 2014 to 2018, she led finance for Human Health, Merck's largest business. She was also instrumental in the integration of Merck and Schering-Plough after their 2009 merger, serving as vice president and finance lead for the Emerging Markets region. She was appointed Executive Vice President and CFO, effective April 1, 2021. In June 2024, she was elected to the board of directors for Verizon.
Dean Y. Li, M.D., Ph.D., Executive Vice President and President, Merck Research Laboratories
Dean Y. Li is the Executive Vice President and President of Merck Research Laboratories, where he leads the company's global human vaccines and therapeutics research and development organization. He joined Merck in 2017, taking on leadership roles within the Translational Medicine and Discovery functions. Dr. Li was appointed President of Merck Research Laboratories in January 2021. Before joining Merck, he held positions of increasing responsibility in translational medical research at the University of Utah.
Sanat Chattopadhyay, Executive Vice President and President, Merck Manufacturing Division
Sanat Chattopadhyay is the Executive Vice President and President of the Merck Manufacturing Division. His professional background includes experience with companies such as Pfizer and Sanofi. He has an educational background that includes studies at Jadavpur University and NITIE.
Richard R. DeLuca, Jr., Executive Vice President and President, Merck Animal Health
Richard R. DeLuca, Jr. holds the position of Executive Vice President and President of Merck Animal Health.
AI Analysis | Feedback
- Keytruda Patent Cliff: The most significant risk for Merck is the impending patent expiration of its flagship oncology drug, Keytruda (pembrolizumab). Keytruda's primary U.S. patents are set to expire in late 2028, with some extensions potentially pushing exclusivity to 2029. This drug is a major revenue driver for Merck, accounting for nearly half of its pharmaceutical sales in 2024 and 40% in 2023. Analysts project Keytruda sales to peak around $33–34 billion in 2028, followed by a substantial decline of approximately 19% to about $27.4 billion by 2029 as biosimilars enter the U.S. market. Merck is actively pursuing mitigation strategies, including developing a subcutaneous formulation (Keytruda Qlex) that received FDA approval in September 2025, which may help retain patient loyalty and extend some protection, possibly until 2040 or longer for specific formulations. The company is also implementing a $3 billion cost-cutting initiative and investing in new product launches and pipeline development to offset the anticipated revenue decline.
- Loss of Exclusivity for Other Key Products: Beyond Keytruda, Merck faces a broader "loss-of-exclusivity (LOE) wave" for several other significant pharmaceutical products between 2025 and 2029, putting nearly half of its 2024 pharmaceutical revenue at risk. Notably, Januvia/Janumet, Lenvima (in partnership with Eisai), and Gardasil 9 are also facing patent expirations or generic competition around the same period. For instance, U.S. generics for Januvia are expected by mid-2026, and Gardasil 9 U.S. patents expire in 2028. This collective expiration of patents on major revenue-generating drugs presents a significant challenge to Merck's market share and overall revenues.
- Regulatory Changes and Pricing Pressures: Merck, as a global pharmaceutical company, is continuously subject to evolving and increasingly stringent regulatory requirements, particularly concerning drug pricing and reimbursement. With rising global healthcare expenditures, governments worldwide are increasing pressure on pharmaceutical companies, which can negatively impact product profitability and the success of market launches. The Inflation Reduction Act (IRA) in the U.S., for example, includes Medicare price cuts that are active from January 2028, further contributing to pricing pressures.
AI Analysis | Feedback
- The rapid advancement and expansion of mRNA technology by competitors, potentially displacing Merck's traditional vaccine platforms and certain therapeutic areas.
- The implementation and potential expansion of government-mandated drug price negotiation (e.g., under the U.S. Inflation Reduction Act), which threatens the profitability and R&D investment model for Merck's pharmaceutical products.
AI Analysis | Feedback
Merck (MRK) operates in diverse healthcare markets, with substantial addressable markets for its main products and services across both its Pharmaceutical and Animal Health segments.
Pharmaceutical Segment
- Oncology: The global oncology market size was estimated at approximately USD 225.01 billion in 2024 and is projected to reach around USD 668.26 billion by 2034. North America held approximately a 46% share of this market in 2024.
- Hospital Acute Care: The global acute hospital care market generated a revenue of USD 3,344,042.1 million (or USD 3.34 trillion) in 2023 and is expected to reach USD 4,903,896.5 million (or USD 4.9 trillion) by 2030. North America was the largest revenue-generating market in 2023, accounting for 55.8% of the global market.
- Immunology: The global immunology market size was valued at USD 108.40 billion in 2024 and is estimated to hit around USD 286.38 billion by 2034. In 2024, North America dominated the global market with the largest share of 53%.
- Neuroscience: The global neuroscience market generated a revenue of USD 44,653.7 million in 2023 and is expected to reach USD 65,224.5 million by 2030. North America was the largest revenue-generating market in 2023.
- Virology: The global virology market size was valued at USD 2.55 billion in 2024 and is projected to reach USD 4.51 billion by 2033. North America was the largest contributor to this market in 2024.
- Cardiovascular: The global cardiovascular drugs market size is calculated at USD 155.96 billion in 2025 and is predicted to increase to approximately USD 214.72 billion by 2034.
- Diabetes: The global diabetes drugs market size was valued at USD 101.48 billion in 2025 and is projected to grow to USD 283.36 billion by 2034. North America dominated the diabetes drugs market with a market share of 49.95% in 2025.
- Vaccines (Human Health): The global human vaccines market was valued at USD 82.80 billion in 2024 and is expected to reach USD 186.73 billion by 2032. North America dominated the vaccine market with the largest revenue share of 38.3% in 2024.
Animal Health Segment
- Veterinary Pharmaceuticals, Vaccines, and Health Management Solutions: The global animal health market size was valued at USD 67.92 Billion in 2024 and is poised to grow to USD 128.05 Billion by 2033. North America held a significant market share of 44.9% in 2025.
AI Analysis | Feedback
Merck (MRK) anticipates several key drivers to fuel its future revenue growth over the next two to three years:
- Accelerated Launch of New Products and Pipeline Expansion: Merck is intensifying its efforts to launch new drugs and has substantially expanded its late-stage pipeline. The company projects approximately $50 billion in revenue from new growth drivers by the early 2030s, contributing to a target of $70 billion by the mid-2030s. This includes a focus on 10 major programs, all identified as multibillion-dollar opportunities, with several already launched or having positive Phase III clinical trial data.
- Growth in Cardiometabolic and Respiratory Treatments: This therapeutic area is expected to be a significant contributor to future sales, with Merck forecasting nearly $20 billion from these treatments, an increase from previous estimates. New products like Winrevair, particularly for pulmonary arterial hypertension, are anticipated to drive sustained growth.
- Expansion in Infectious Disease Medications: Merck has significantly raised its projections for infectious disease drugs, expecting them to generate approximately $15 billion in sales, a substantial increase from earlier forecasts.
- Sustained Performance and Pipeline Augmentation in Oncology: While Keytruda continues to be a major revenue driver, particularly with increased uptake in earlier-stage cancers and strong international demand, Merck is actively fortifying its oncology pipeline through new product launches and strategic acquisitions to mitigate the impact of future patent expirations. Products like Welireg are also noted as growth drivers.
- Continued Growth in the Animal Health Segment: The Animal Health segment is consistently identified as a source of revenue growth, propelled by strong demand for companion animal products, such as the Bravecto line, favorable pricing strategies, and increased demand for livestock products. Acquisitions, such as the Elanco aqua business, are also expected to contribute to this segment's expansion.
AI Analysis | Feedback
Capital Allocation Decisions of Merck (MRK) (2021-2025)
Share Repurchases
- Merck's Board of Directors authorized a new $10 billion stock repurchase program in January 2025, with no specified expiration date.
- The company executed annual share buybacks of $1.346 billion in 2023 and $1.306 billion in 2024.
- For the full year 2025, Merck's total share repurchases amounted to approximately $5.13 billion.
Inbound Investments
- In November 2025, Merck secured $700 million in non-refundable funding from Blackstone Life Sciences to support the development of sacituzumab tirumotecan (sac-TMT), an investigational antibody-drug conjugate for various cancer types.
Outbound Investments
- Merck acquired Acceleron Pharma for $11.5 billion in September 2021.
- In April 2023, the company acquired Prometheus Biosciences for $10.8 billion.
- Merck announced an agreement in early July 2025 to acquire Verona Pharma for approximately $10 billion.
Capital Expenditures
- Merck's capital expenditures increased from $3.123 billion in 2023 to $3.475 billion in 2024.
- For the full fiscal year 2025, investment spending included $4.11 billion in capital expenditures.
- The company intends to reinvest savings from a multi-year optimization initiative into higher-growth areas of its pipeline development and to expand its long-term product portfolio.
Latest Trefis Analyses
Research & Analysis
Invest in Strategies
Wealth Management
Peer Comparisons
| Peers to compare with: |
Financials
| Median | |
|---|---|
| Name | |
| Mkt Price | 193.70 |
| Mkt Cap | 388.6 |
| Rev LTM | 64,541 |
| Op Inc LTM | 18,176 |
| FCF LTM | 13,012 |
| FCF 3Y Avg | 13,283 |
| CFO LTM | 19,185 |
| CFO 3Y Avg | 15,811 |
Growth & Margins
| Median | |
|---|---|
| Name | |
| Rev Chg LTM | 5.4% |
| Rev Chg 3Y Avg | 4.0% |
| Rev Chg Q | 7.6% |
| QoQ Delta Rev Chg LTM | 1.7% |
| Op Inc Chg LTM | 41.0% |
| Op Inc Chg 3Y Avg | 44.2% |
| Op Mgn LTM | 27.4% |
| Op Mgn 3Y Avg | 22.9% |
| QoQ Delta Op Mgn LTM | -0.4% |
| CFO/Rev LTM | 27.3% |
| CFO/Rev 3Y Avg | 27.1% |
| FCF/Rev LTM | 19.8% |
| FCF/Rev 3Y Avg | 21.0% |
Valuation
| Median | |
|---|---|
| Name | |
| Mkt Cap | 388.6 |
| P/S | 5.7 |
| P/Op Inc | 23.0 |
| P/EBIT | 24.3 |
| P/E | 32.9 |
| P/CFO | 19.7 |
| Total Yield | 5.3% |
| Dividend Yield | 2.6% |
| FCF Yield 3Y Avg | 5.5% |
| D/E | 0.2 |
| Net D/E | 0.1 |
Returns
| Median | |
|---|---|
| Name | |
| 1M Rtn | 8.8% |
| 3M Rtn | 13.9% |
| 6M Rtn | 17.0% |
| 12M Rtn | 44.3% |
| 3Y Rtn | 48.5% |
| 1M Excs Rtn | - |
| 3M Excs Rtn | - |
| 6M Excs Rtn | - |
| 12M Excs Rtn | - |
| 3Y Excs Rtn | - |
Comparison Analyses
Segment Financials
Revenue by Segment| $ Mil | 2025 | 2024 | 2023 | 2022 | 2021 |
|---|---|---|---|---|---|
| Pharmaceutical | 58,142 | 57,400 | 53,583 | 52,005 | 42,754 |
| Animal Health | 6,354 | 5,877 | 5,625 | 5,550 | 5,568 |
| Other | 515 | 891 | 907 | 1,728 | 382 |
| Total | 65,011 | 64,168 | 60,115 | 59,283 | 48,704 |
| $ Mil | 2015 | 2014 | 2013 | 2012 | 2011 |
|---|---|---|---|---|---|
| Pharmaceutical | 21,658 | 22,164 | 22,983 | 25,852 | 25,617 |
| Other segment | 1,659 | 2,546 | 3,094 | ||
| Other | 810 | 539 | 19 | 26 | 90 |
| Corporate | -17,199 | -19,579 | -19,736 | -19,429 | -20,260 |
| All other segment revenues | 3,163 | 2,703 | |||
| Total | 6,928 | 5,670 | 6,360 | 9,612 | 8,150 |
Price Behavior
| Market Price | $130.48 | |
| Market Cap ($ Bil) | 322.5 | |
| First Trading Date | 01/02/1970 | |
| Distance from 52W High | 0.0% | |
| 50 Days | 200 Days | |
| DMA Price | $120.34 | $109.01 |
| DMA Trend | up | up |
| Distance from DMA | 8.4% | 19.7% |
| 3M | 1YR | |
| Volatility | 30.7% | 28.0% |
| Downside Capture | -84.98 | -13.46 |
| Upside Capture | -6.14 | 45.30 |
| Correlation (SPY) | -18.1% | 8.0% |
| 1M | 2M | 3M | 6M | 1Y | 3Y | |
|---|---|---|---|---|---|---|
| Beta | -0.40 | -0.31 | 0.04 | 0.10 | 0.20 | 0.30 |
| Up Beta | -0.79 | -1.20 | 0.36 | 0.49 | 0.50 | 0.42 |
| Down Beta | -0.02 | 0.05 | -0.12 | -0.02 | -0.24 | 0.32 |
| Up Capture | 7% | 42% | 11% | 19% | 47% | 6% |
| Bmk +ve Days | 11 | 24 | 40 | 67 | 140 | 429 |
| Stock +ve Days | 13 | 24 | 32 | 64 | 132 | 380 |
| Down Capture | -91% | -89% | -42% | -31% | -7% | 38% |
| Bmk -ve Days | 10 | 17 | 23 | 58 | 112 | 321 |
| Stock -ve Days | 8 | 17 | 31 | 61 | 120 | 368 |
[1] Upside and downside betas calculated using positive and negative benchmark daily returns respectively
Based On 1-Year Data
| Annualized Return | Annualized Volatility | Sharpe Ratio | Correlation with MRK | |
|---|---|---|---|---|
| MRK | 65.6% | 28.1% | 1.78 | - |
| Sector ETF (XLV) | 22.6% | 15.8% | 1.10 | 70.2% |
| Equity (SPY) | 18.5% | 12.7% | 1.06 | 6.8% |
| Gold (GLD) | 17.6% | 28.1% | 0.57 | 3.3% |
| Commodities (DBC) | 35.2% | 19.1% | 1.45 | -16.3% |
| Real Estate (VNQ) | 11.6% | 13.9% | 0.55 | 36.1% |
| Bitcoin (BTCUSD) | -45.1% | 42.9% | -1.28 | -0.4% |
Smart multi-asset allocation framework can stack odds in your favor. Learn How
Based On 5-Year Data
| Annualized Return | Annualized Volatility | Sharpe Ratio | Correlation with MRK | |
|---|---|---|---|---|
| MRK | 14.4% | 24.1% | 0.53 | - |
| Sector ETF (XLV) | 6.3% | 15.0% | 0.24 | 56.8% |
| Equity (SPY) | 12.6% | 17.1% | 0.57 | 19.7% |
| Gold (GLD) | 16.8% | 18.4% | 0.74 | 1.1% |
| Commodities (DBC) | 9.8% | 19.5% | 0.39 | -1.3% |
| Real Estate (VNQ) | 2.6% | 18.9% | 0.03 | 25.9% |
| Bitcoin (BTCUSD) | 15.8% | 53.4% | 0.47 | 4.9% |
Smart multi-asset allocation framework can stack odds in your favor. Learn How
Based On 10-Year Data
| Annualized Return | Annualized Volatility | Sharpe Ratio | Correlation with MRK | |
|---|---|---|---|---|
| MRK | 12.0% | 23.1% | 0.49 | - |
| Sector ETF (XLV) | 10.0% | 16.6% | 0.49 | 64.3% |
| Equity (SPY) | 14.9% | 17.9% | 0.71 | 38.5% |
| Gold (GLD) | 11.2% | 16.1% | 0.57 | 2.3% |
| Commodities (DBC) | 7.4% | 17.9% | 0.33 | 8.8% |
| Real Estate (VNQ) | 4.9% | 20.7% | 0.20 | 36.4% |
| Bitcoin (BTCUSD) | 58.7% | 66.2% | 0.99 | 4.6% |
Smart multi-asset allocation framework can stack odds in your favor. Learn How
Returns Analyses
Earnings Returns History
Updated 6/3/2026| Forward Returns | |||
|---|---|---|---|
| Earnings Date | 1D Returns | 5D Returns | 21D Returns |
| 4/30/2026 | -1.6% | 2.4% | 7.0% |
| 2/3/2026 | 2.2% | 3.8% | 6.1% |
| 10/30/2025 | -0.3% | -2.5% | 17.6% |
| 7/29/2025 | -1.7% | -5.0% | 1.1% |
| 4/24/2025 | 1.4% | 8.2% | -1.1% |
| 2/4/2025 | -9.1% | -13.4% | -6.6% |
| 10/31/2024 | -2.4% | -3.9% | -3.0% |
| 7/30/2024 | -9.8% | -12.1% | -8.8% |
| ... | |||
| SUMMARY STATS | |||
| # Positive | 10 | 11 | 11 |
| # Negative | 14 | 13 | 13 |
| Median Positive | 2.0% | 3.8% | 6.1% |
| Median Negative | -1.7% | -3.6% | -2.2% |
| Max Positive | 6.1% | 8.8% | 17.6% |
| Max Negative | -9.8% | -13.4% | -8.8% |
| Forward Returns | |||
|---|---|---|---|
| Earnings Date | 1D Returns | 5D Returns | 21D Returns |
| 4/30/2026 | -1.6% | 2.4% | 7.0% |
| 2/3/2026 | 2.2% | 3.8% | 6.1% |
| 10/30/2025 | -0.3% | -2.5% | 17.6% |
| 7/29/2025 | -1.7% | -5.0% | 1.1% |
| 4/24/2025 | 1.4% | 8.2% | -1.1% |
| 2/4/2025 | -9.1% | -13.4% | -6.6% |
| 10/31/2024 | -2.4% | -3.9% | -3.0% |
| 7/30/2024 | -9.8% | -12.1% | -8.8% |
| 4/25/2024 | 2.9% | 1.4% | 3.2% |
| 2/1/2024 | 4.6% | 5.5% | 5.1% |
| 10/26/2023 | 1.9% | -0.8% | -1.7% |
| 8/1/2023 | -1.3% | -0.5% | 3.1% |
| 4/27/2023 | 1.5% | 4.2% | -1.0% |
| 2/2/2023 | -3.3% | -0.3% | -0.1% |
| 10/27/2022 | 1.4% | 1.0% | 9.2% |
| 7/28/2022 | -1.4% | -4.0% | -1.1% |
| 4/28/2022 | 4.9% | 4.9% | 9.4% |
| 2/3/2022 | -3.7% | -6.7% | -5.1% |
| 10/28/2021 | 6.1% | 8.8% | -2.9% |
| 7/29/2021 | -1.8% | -3.6% | -2.2% |
| 4/29/2021 | -4.4% | 0.8% | -1.5% |
| 2/4/2021 | -1.7% | -3.1% | -5.4% |
| 10/27/2020 | -1.1% | -2.7% | 1.6% |
| 7/31/2020 | 1.6% | 2.6% | 8.4% |
| SUMMARY STATS | |||
| # Positive | 10 | 11 | 11 |
| # Negative | 14 | 13 | 13 |
| Median Positive | 2.0% | 3.8% | 6.1% |
| Median Negative | -1.7% | -3.6% | -2.2% |
| Max Positive | 6.1% | 8.8% | 17.6% |
| Max Negative | -9.8% | -13.4% | -8.8% |
SEC Filings
Expand for More| Report Date | Filing Date | Filing |
|---|---|---|
| 03/31/2026 | 05/04/2026 | 10-Q |
| 12/31/2025 | 02/24/2026 | 10-K |
| 09/30/2025 | 11/05/2025 | 10-Q |
| 06/30/2025 | 08/05/2025 | 10-Q |
| 03/31/2025 | 05/02/2025 | 10-Q |
| 12/31/2024 | 02/25/2025 | 10-K |
| 09/30/2024 | 11/06/2024 | 10-Q |
| 06/30/2024 | 08/05/2024 | 10-Q |
| 03/31/2024 | 05/03/2024 | 10-Q |
| 12/31/2023 | 02/26/2024 | 10-K |
| 09/30/2023 | 11/03/2023 | 10-Q |
| 06/30/2023 | 08/07/2023 | 10-Q |
| 03/31/2023 | 05/05/2023 | 10-Q |
| 12/31/2022 | 02/24/2023 | 10-K |
| 09/30/2022 | 11/03/2022 | 10-Q |
| 06/30/2022 | 08/05/2022 | 10-Q |
| Report Date | Filing Date | Filing |
|---|---|---|
| 03/31/2026 | 05/04/2026 | 10-Q |
| 12/31/2025 | 02/24/2026 | 10-K |
| 09/30/2025 | 11/05/2025 | 10-Q |
| 06/30/2025 | 08/05/2025 | 10-Q |
| 03/31/2025 | 05/02/2025 | 10-Q |
| 12/31/2024 | 02/25/2025 | 10-K |
| 09/30/2024 | 11/06/2024 | 10-Q |
| 06/30/2024 | 08/05/2024 | 10-Q |
| 03/31/2024 | 05/03/2024 | 10-Q |
| 12/31/2023 | 02/26/2024 | 10-K |
| 09/30/2023 | 11/03/2023 | 10-Q |
| 06/30/2023 | 08/07/2023 | 10-Q |
| 03/31/2023 | 05/05/2023 | 10-Q |
| 12/31/2022 | 02/24/2023 | 10-K |
| 09/30/2022 | 11/03/2022 | 10-Q |
| 06/30/2022 | 08/05/2022 | 10-Q |
| 03/31/2022 | 05/05/2022 | 10-Q |
| 12/31/2021 | 02/25/2022 | 10-K |
| 09/30/2021 | 11/05/2021 | 10-Q |
| 06/30/2021 | 08/09/2021 | 10-Q |
| 03/31/2021 | 05/05/2021 | 10-Q |
| 12/31/2020 | 02/25/2021 | 10-K |
| 09/30/2020 | 11/05/2020 | 10-Q |
| 06/30/2020 | 08/05/2020 | 10-Q |
| 03/31/2020 | 05/06/2020 | 10-Q |
| 12/31/2019 | 02/26/2020 | 10-K |
| 09/30/2019 | 11/05/2019 | 10-Q |
| 06/30/2019 | 08/06/2019 | 10-Q |
Recent Forward Guidance
Updated 7/8/2026Latest: Q1 2026 Earnings Reported 4/30/2026
| Forward Guidance | Guidance Change | ||||||
|---|---|---|---|---|---|---|---|
| Metric | Low | Mid | High | % Chg | % Delta | Change | Prior |
| 2026 Sales | 65.80 Bil | 66.40 Bil | 67.00 Bil | 0.2% | Raised | Guidance: 66.25 Bil for 2026 | |
| 2026 Non-GAAP Gross margin | 82.0% | 0 | Affirmed | Guidance: 82.0% for 2026 | |||
| 2026 Non-GAAP Operating expenses | 36.00 Bil | 36.40 Bil | 36.80 Bil | 0 | Affirmed | Guidance: 36.40 Bil for 2026 | |
| 2026 Non-GAAP Effective income tax rate | 23.5% | 24.0% | 24.5% | 0 | Affirmed | Guidance: 24.0% for 2026 | |
| 2026 Non-GAAP EPS | 5.04 | 5.1 | 5.16 | 0.5% | Raised | Guidance: 5.08 for 2026 | |
Prior: Q4 2025 Earnings Reported 2/3/2026
| Forward Guidance | Guidance Change | ||||||
|---|---|---|---|---|---|---|---|
| Metric | Low | Mid | High | % Chg | % Delta | Change | Prior |
| 2026 Revenue | 65.50 Bil | 66.25 Bil | 67.00 Bil | 2.3% | Higher New | Guidance: 64.75 Bil for 2025 | |
| 2026 Non-GAAP Gross Margin | 82.0% | ||||||
| 2026 Non-GAAP Operating Expenses | 35.90 Bil | 36.40 Bil | 36.90 Bil | 39.2% | Higher New | Guidance: 26.15 Bil for 2025 | |
| 2026 Non-GAAP Effective Tax Rate | 23.5% | 24.0% | 24.5% | 9.5% | Higher New | Guidance: 14.5% for 2025 | |
| 2026 EPS | 5 | 5.08 | 5.15 | -43.3% | Lower New | Guidance: 8.96 for 2025 | |
Q3 2025 Earnings Reported 10/30/2025
| Forward Guidance | Guidance Change | ||||||
|---|---|---|---|---|---|---|---|
| Metric | Low | Mid | High | % Chg | % Delta | Change | Prior |
| 2025 Revenue | 64.50 Bil | 64.75 Bil | 65.00 Bil | -0.1% | Lowered | Guidance: 64.80 Bil for 2025 | |
| 2025 Non-GAAP EPS | 8.93 | 8.96 | 8.98 | 0.4% | Raised | Guidance: 8.92 for 2025 | |
| 2025 Non-GAAP Operating Expenses | 25.90 Bil | 26.15 Bil | 26.40 Bil | 0.6% | Raised | Guidance: 26.00 Bil for 2025 | |
| 2025 Non-GAAP Effective Tax Rate | 14.0% | 14.5% | 15.0% | -1.0% | Lowered | Guidance: 15.5% for 2025 | |
Insider Activity
Updated 7/1/2026| # | Owner | Title | Holding | Action | Filing Date | Price | Shares | Transacted Value | Value of Held Shares | Form |
|---|---|---|---|---|---|---|---|---|---|---|
| 1 | Guindo, Chirfi | Chief Marketing Officer | Direct | Sell | 2122026 | 121.46 | 10,000 | 1,214,562 | 7,362,083 | Form |
| 2 | Guindo, Chirfi | Chief Marketing Officer | Direct | Sell | 2092026 | 118.41 | 10,000 | 1,184,101 | 8,361,544 | Form |
| 3 | Zachary, Jennifer | EVP, General Counsel | Direct | Sell | 2092026 | 119.15 | 121,573 | 14,485,690 | 8,211,454 | Form |
| 4 | Williams, David Michael | EVP,Chief Info&Digital Officer | Direct | Sell | 2062026 | 121.91 | 5,000 | 609,525 | 3,759,275 | Form |
| 5 | Oosthuizen, Johannes Jacobus | President, U.S. Market | Direct | Sell | 2062026 | 121.87 | 15,000 | 1,827,992 | 2,583,243 | Form |
| # | Owner | Title | Holding | Action | Filing Date | Price | Shares | Transacted Value | Value of Held Shares | Form |
|---|---|---|---|---|---|---|---|---|---|---|
| 1 | Guindo, Chirfi | Chief Marketing Officer | Direct | Sell | 2122026 | 121.46 | 10,000 | 1,214,562 | 7,362,083 | Form |
| 2 | Guindo, Chirfi | Chief Marketing Officer | Direct | Sell | 2092026 | 118.41 | 10,000 | 1,184,101 | 8,361,544 | Form |
| 3 | Zachary, Jennifer | EVP, General Counsel | Direct | Sell | 2092026 | 119.15 | 121,573 | 14,485,690 | 8,211,454 | Form |
| 4 | Williams, David Michael | EVP,Chief Info&Digital Officer | Direct | Sell | 2062026 | 121.91 | 5,000 | 609,525 | 3,759,275 | Form |
| 5 | Oosthuizen, Johannes Jacobus | President, U.S. Market | Direct | Sell | 2062026 | 121.87 | 15,000 | 1,827,992 | 2,583,243 | Form |
| 6 | Deluca, Richard R | EVP&Pres, Merck Animal Heallth | Direct | Sell | 2062026 | 120.92 | 37,685 | 4,557,025 | 19,368,877 | Form |
| 7 | Guindo, Chirfi | Chief Marketing Officer | Direct | Sell | 2062026 | 121.88 | 20,000 | 2,437,676 | 9,825,678 | Form |
| 8 | Smart, Dalton E Iii | SVP Fin. - Global Controller | Direct | Sell | 2062026 | 119.67 | 6,400 | 765,920 | 981,911 | Form |
| 9 | Litchfield, Caroline | EVP & CFO | Direct | Sell | 2062026 | 119.61 | 41,997 | 5,023,312 | 10,787,997 | Form |
| 10 | Li, Dean Y | Executive VP & President, MRL | Direct | Sell | 2062026 | 118.77 | 15,087 | 1,791,824 | 12,146,215 | Form |
| 11 | Davis, Robert M | Chairman, CEO & President | Direct | Sell | 2062026 | 118.04 | 47,434 | 5,599,327 | 52,364,789 | Form |
| 12 | Downing, Cristal N | Chief Comm. & Public Afrs Ofcr | Direct | Sell | 11122025 | 87.00 | 7,085 | Form | ||
| 13 | Williams, David Michael | EVP,Chief Info&Digital Officer | Direct | Sell | 11042025 | 83.59 | 8,614 | 720,040 | 2,054,465 | Form |
Investor Activity (13F)
Updated Jul 24, 2026Active managers (13F portfolio over $250M, at least 3 holdings) with a position over $5M that is either over 10% of their portfolio or held in a concentrated book of 50 or fewer total positions. Index/ETF, sovereign, bank, community-bank and charitable/donor-advised filers are excluded.
| Active Manager | Value | % of Portfolio | Total Positions | QoQ | Filing |
|---|---|---|---|---|---|
| Atle Fund Management AB | $22.9 Mil | 7.4% | 39 | TRIM -82.7% | 13F |
| Sector Gamma AS | $31.3 Mil | 7.4% | 42 | TRIM -28.4% | 13F |
| Smead Capital Management, Inc. | $297.3 Mil | 6.5% | 32 | TRIM -12.9% | 13F |
| Kahn Brothers Group Inc | $27.3 Mil | 4.8% | 48 | TRIM -47.2% | 13F |
| SRB Corp | $55.7 Mil | 3.4% | 44 | Hold | 13F |
| Eldred Rock Partners, LLC | $13.1 Mil | 3.3% | 31 | Hold | 13F |
| Patient Square Capital LP | $9.6 Mil | 1.7% | 29 | New | 13F |
| Martin Investment Management, LLC | $5.7 Mil | 1.7% | 46 | Hold | 13F |
| Central Securities Corp | $18.0 Mil | 1.5% | 30 | Hold | 13F |
| Artia Global Partners LP | $5.6 Mil | 1.3% | 48 | New | 13F |
| Fairfax Financial Holdings LTD/ Can | $20.8 Mil | 1.1% | 29 | Hold | 13F |
| Blackhill Capital Inc | $20.3 Mil | 1.0% | 49 | Hold | 13F |
| Semper Augustus Investments Group LLC | $5.4 Mil | 0.6% | 44 | Hold | 13F |
| Active Manager | Value | % of Portfolio | Total Positions | QoQ | As Of | Filing |
|---|---|---|---|---|---|---|
| FengHe Fund Management Pte. Ltd. | $44.3 Mil | 2.5% | 38 | Exited | Dec 31, 2025 | 13F |
| Atle Fund Management AB | $22.9 Mil | 7.4% | 39 | TRIM -82.7% | Mar 31, 2026 | 13F |
| Kahn Brothers Group Inc | $27.3 Mil | 4.8% | 48 | TRIM -47.2% | Mar 31, 2026 | 13F |
| Sector Gamma AS | $31.3 Mil | 7.4% | 42 | TRIM -28.4% | Mar 31, 2026 | 13F |
| Smead Capital Management, Inc. | $297.3 Mil | 6.5% | 32 | TRIM -12.9% | Mar 31, 2026 | 13F |
| Active Manager | Value | % of Portfolio | Total Positions | QoQ | Filing |
|---|---|---|---|---|---|
| Smead Capital Management, Inc. | $297.3 Mil | 6.5% | 32 | TRIM -12.9% | 13F |
| SRB Corp | $55.7 Mil | 3.4% | 44 | Hold | 13F |
| Sector Gamma AS | $31.3 Mil | 7.4% | 42 | TRIM -28.4% | 13F |
| Kahn Brothers Group Inc | $27.3 Mil | 4.8% | 48 | TRIM -47.2% | 13F |
| Atle Fund Management AB | $22.9 Mil | 7.4% | 39 | TRIM -82.7% | 13F |
| Fairfax Financial Holdings LTD/ Can | $20.8 Mil | 1.1% | 29 | Hold | 13F |
| Blackhill Capital Inc | $20.3 Mil | 1.0% | 49 | Hold | 13F |
| Central Securities Corp | $18.0 Mil | 1.5% | 30 | Hold | 13F |
| Eldred Rock Partners, LLC | $13.1 Mil | 3.3% | 31 | Hold | 13F |
| Patient Square Capital LP | $9.6 Mil | 1.7% | 29 | New | 13F |
| Martin Investment Management, LLC | $5.7 Mil | 1.7% | 46 | Hold | 13F |
| Artia Global Partners LP | $5.6 Mil | 1.3% | 48 | New | 13F |
| Semper Augustus Investments Group LLC | $5.4 Mil | 0.6% | 44 | Hold | 13F |
MRK Trade Sentinel
Constructive
CONVICTION RATIONALE
Merck is successfully executing a major portfolio pivot. The core growth engine, Keytruda, is re-accelerating while new launches like Winrevair are ramping strongly. A deep pipeline with over 20 potential blockbusters provides a path to offset the 2028 patent cliff. While near-term margins are pressured by strategic investments, strong cash flow funds this transition.
STOCK ARCHETYPE
Patented Franchise(Volume of Doses Sold) x (Net Realized Price per Dose) across a portfolio of patent-protected products. The high gross margins generated from sales of patent-protected, high-value specialty drugs, particularly the flagship oncology therapy, Keytruda.
INVESTMENT THESIS
Evidence suggests the transition is on track, with new products showing strong early momentum and a deep late-stage pipeline.
- Management sees over $70 billion in potential opportunity from its pipeline.
- New launch Winrevair generated $525 million in Q1 2026 sales.
- Keytruda sales growth re-accelerated to 12% in Q1 2026.
- The company has approximately 80 Phase 3 studies underway.
- Full-year 2026 revenue guidance was raised to a range of $65.8 billion to $67.0 billion.
PRIMARY RISK
The 2028-2029 loss of Keytruda, which was 49% of 2025 sales, creates a massive revenue hole that the pipeline may fail to fill in time, especially with nearer-term cliffs.
- Keytruda faces biosimilar competition between 2028 and 2029.
- Januvia and Janumet lost U.S. market exclusivity in May 2026.
- Bridion lost U.S. market exclusivity in July 2026.
- Keytruda is expected to face government price setting in 2027.
- TTM operating margin is down to 19.7% from 31.9% a year ago.
| KPI | Status | Rationale |
|---|---|---|
| Keytruda/Keytruda Qlex Sales Growth | 12% year-over-year growth in Q1 2026 - Accelerating | The year-over-year growth trend decelerated through 2025, from 9% in Q2 to 5% in Q4, before sharply re-accelerating to 12% in the most recent quarter. Management noted the latest quarter benefited from the timing of purchases, but stated underlying drivers like demand in metastatic and earlier-stage cancers remain robust. |
| Winrevair Sales | $525 million in Q1 2026 - Accelerating | The product is on a strong launch trajectory, with sales growing sequentially each quarter since launch, from $336 million in Q2 2025 to $525 million in Q1 2026. Management highlights strong demand and noted "more than 1,600 new patients having received a prescription" in the latest quarter. |
| Latest-Quarter Revenue Growth (Y/Y) | 4.9% (Q2 2026 (ended 6/30/2026)) | Indicates the near-term growth trajectory of the company's consolidated sales compared to the prior year. |
| Trailing-Twelve-Month Revenue Growth (Y/Y) | 2.9% (TTM ended 6/30/2026) | Provides a smoothed, longer-term view of revenue growth, reducing the impact of quarterly volatility. |
| Trailing-Twelve-Month Operating Margin | 19.7% (TTM ended 6/30/2026) | Measures core profitability from operations. The significant year-over-year decline from 31.9% signals major cost pressures or changes in business mix. |
Pipeline Ramp vs. Patent Cliff
BULL VIEW
Bulls believe the strong ramp of new drugs like Winrevair ($525M in Q1) and a pipeline with $70B potential will more than offset the loss of legacy drugs.
CORE TENSION
Can the new product pipeline, with a stated $70B opportunity, ramp fast enough to offset the loss of Keytruda, which represented 49% of 2025 sales?
PREVAILING SENTIMENT
The latest evidence favors the bulls. Keytruda's own growth re-accelerated to 12%, while new launches are showing strong early traction, and 2026 guidance was raised.
BEAR VIEW
Bears see the imminent loss of Januvia and Bridion in mid-2026 as a preview of the massive Keytruda cliff, which at 49% of sales is too large to replace.
| Timeline | Event & Metric To Watch |
|---|---|
August 17, 2026 | Keytruda Combination Approval Risk Watch: The FDA's decision. A Complete Response Letter or a restrictive label would negatively impact a key growth indication. |
August 17, 2026 | Keytruda Bladder Cancer Decision Watch: FDA target action date for KEYTRUDA and KEYTRUDA Qlex in combination with Padcev for cisplatin-eligible muscle invasive bladder cancer. |
September 21, 2026 | Winrevair Label Update Decision Watch: FDA target action date for a proposed update to the U.S. product label for Winrevair based on the HYPERION trial. |
October 4, 2026 | Welireg Kidney Cancer Decision Watch: FDA target action date for Welireg in combination with Lenvima for the treatment of certain patients with advanced RCC. |
October 10, 2026 | I-DXd Lung Cancer Decision Watch: FDA target action date for ifinatamab deruxtecan (I-DXd) for the treatment of adult patients with previously treated extensive-stage small cell lung cancer. |
10/13/2026 | Competitive Readouts in Oncology Watch: JNJ's results and commentary on its oncology pipeline, particularly in multiple myeloma (DARZALEX, CARVYKTI) and lung/bladder cancer. |
10/29/2026 | Bridion Sales Erosion Watch: Management's quantification of the sales impact and any revision to full-year guidance during the Q3 earnings call. |
10/29/2026 | Sustained Margin Pressure Watch: Q3 operating margin results and management's outlook on the duration of the heavy investment cycle versus revenue acceleration. |
coming months | Multiple Pipeline Data Readouts Watch: Data readouts expected for tulisokibart (ATLAS-UC). |
second half of 2026 | Keytruda Breast Cancer Decision Watch: FDA target action dates for KEYTRUDA and KEYTRUDA Qlex in combination with Trodelvy for first-line treatment of TNBC. |
| Date | Event | Stock Impact |
|---|---|---|
2026-07-16 | FDA Approved First Oral PCSK9 Details: On July 16, 2026, the FDA approved the first oral PCSK9 inhibitor, enlicitide decanoate (news refers to it as LIPFENDRA), for hypercholesterolemia. | +3.1% $123.61 -> $127.50 |
2026-06-22 | Positive Tulisokibart Phase Three Data Details: On June 22, 2026, Merck announced positive topline results from the Phase 3 ATLAS-UC study for tulisokibart in patients with moderately to severely active ulcerative colitis. | +5.0% $113.87 -> $119.60 |
2026-05-29 | Calderasib Granted Breakthrough Designation Details: On May 29, 2026, the FDA granted Breakthrough Therapy designation for Calderasib (MK-1084), an investigational KRAS G12C inhibitor, in combination with KEYTRUDA for NSCLC. | -3.9% $119.03 -> $114.35 |
2026-04-30 | Raised Full-Year Guidance Details: At the earnings report dated 4/30/2026, the company raised its 2026 Sales guidance by 0.2% and its 2026 Non-GAAP EPS guidance by 0.5%. | +1.1% $110.16 -> $111.36 |
2026-03-01 | Announced Terns Pharma Acquisition Details: In March 2026, Merck announced a definitive agreement to acquire Terns Pharmaceuticals for approximately $6.7 billion, gaining its lead candidate for chronic myeloid leukemia. | +1.8% $117.58 -> $119.66 |
2026-02-03 | Positive Q4 Earnings Reaction Details: Around the earnings call dated 2026-02-03, the two-day stock reaction was 4.0% versus -1.0% for the S&P 500. | +4.4% $111.73 -> $116.62 |
2026-01-01 | Acquired Cidara Therapeutics Details: In January 2026, Merck acquired Cidara Therapeutics for $9.2 billion. The deal added a long-acting antiviral for influenza to the pipeline. | +0.4% $104.53 -> $104.91 |
Position Sizing
5% - 7%
NORMAL POSITION
Sizing is volatility-based: MRK trades at roughly 28% annualized options-implied volatility versus about 15% for the S&P 500 (1.9x the market), around the 74th percentile of its own trailing year. A 5% - 7% position keeps a single-name swing of that size within a diversified portfolio's risk budget.
Diversification Alternatives
LLY - Eli Lilly
Pure-Play GrowthEli Lilly offers significantly higher current growth, with TTM revenue up 47.4% versus Merck's 2.9%, and superior operating margins of 47.3% versus 19.7%.
JNJ - Johnson & Johnson
Diversified ScaleJohnson & Johnson has a larger, more diversified revenue base across pharmaceuticals and medical technology, providing greater scale and stability than Merck's more concentrated portfolio.
Merck is in a race against time, leveraging its massive R&D engine and strategic acquisitions to build a new, diversified portfolio of blockbuster drugs before its primary profit driver, Keytruda, loses patent protection in 2028-2029.
The investment thesis hinges on the successful execution of Merck's late-stage pipeline and new product launches. The company is transforming its portfolio with over 20 potential new growth drivers, including promising candidates in cardiovascular (enlicitide), immunology (tulisokibart), and next-generation oncology (ADCs like sac-TMT). These new assets must ramp up significantly to offset the impending and substantial revenue loss from Keytruda and other key products like Januvia and Bridion facing near-term patent cliffs.
Positive Phase 3 data readouts for key pipeline assets (e.g., tulisokibart, islatravir combinations), faster-than-expected commercial uptake of new launches like Winrevair, and value-accretive acquisitions.
Clinical trial failures or delays for late-stage pipeline candidates, slower-than-anticipated commercial launches, or an earlier-than-expected loss of market exclusivity for Keytruda.
Quarterly fluctuations in Gardasil sales due to purchasing patterns in China or the U.S., or minor stock reactions to early-phase trial data.
Repricing Catalyst
A robust period of Phase 3 data readouts from novel candidates expected over the next 18 months, including data for tulisokibart in ulcerative colitis and islatravir/lenacapavir for HIV.
Pharmaceutical
$58.9B TTM (89% of Total)What It Is
Sells human health pharmaceutical and vaccine products, such as the oncology drug Keytruda, HPV vaccine Gardasil, and diabetes treatments Januvia/Janumet, primarily to drug wholesalers, retailers, hospitals, government agencies, and managed health care providers.
Who Pays & How
Government programs (like Medicare/Medicaid), private insurers, and managed care organizations pay for these products to treat and prevent diseases in their covered populations, based on the products' demonstrated safety and efficacy.
Competition
Animal Health
$6.6B TTM (10% of Total)What It Is
Sells a wide range of veterinary pharmaceuticals, vaccines, and health management solutions, including the Bravecto line of parasiticides and Nuflor antibiotics, to veterinarians, distributors, animal producers, farmers, and pet owners.
Who Pays & How
Veterinarians, farmers, and pet owners pay for these products to prevent, treat, and control diseases in livestock and companion animals, ensuring animal health and productivity.
Competition
Industry Resources
| Health Care Resources |
| U.S. National Library of Medicine |
| ClinicalTrials.gov |
| Modern Healthcare |
| Healthcare Dive |
| Fierce Healthcare |
| Health Affairs |
| Health Data Management |
| FDA Tracker |
| Pharmaceuticals Resources |
| Fierce Pharma |
| Pharm Exec |
| Endpoints News |
External Quote Links
| Y Finance | Barrons |
| TradingView | Morningstar |
| SeekingAlpha | ValueLine |
| Motley Fool | Robinhood |
| CNBC | Etrade |
| MarketWatch | Unusual Whales |
| YCharts | Perplexity Finance |
| FinViz |
Prefer one of these to Trefis? Tell us why.