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Buy, Sell or Hold MRK Stock With Q1 Earnings Around the Corner?
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Key Takeaways
Merck is set to report Q1 results with sales seen at $15.9B and a likely earnings beat per our model.
MRK's growth is driven by Keytruda and oncology, but Gardasil's weakness and generics weigh.
New drugs, acquisitions, and pipeline progress aim to offset Keytruda patent risk by 2028.
Merck (MRK - Free Report) is set to report its first-quarter 2026 earnings on April 30, before market open. The Zacks Consensus Estimate for first-quarter top line is pegged at $15.90 billion, while the same for the bottom line stands at a loss of $1.51 per share. Earnings estimates for 2026 have declined from $5.15 to $4.89 per share over the past 30 days.
Image Source: Zacks Investment Research
Earnings Surprise History of Merck
The healthcare bellwether’s performance has been solid, with the company exceeding earnings expectations in each of the trailing four quarters. It delivered a four-quarter earnings surprise of 4.76%, on average. In the last reported quarter, the company delivered an earnings surprise of 0.49%, as seen in the chart below.
Per our proven model, companies with the combination of a positive Earnings ESP and a Zacks Rank #1, #2 (Buy) or #3 have a good chance of delivering an earnings beat. You can uncover the best stocks to buy or sell before they’re reported with our Earnings ESP Filter.
Factors Shaping MRK’s Upcoming Results
Merck’s top-line growth in the first quarter is expected to have been driven by higher sales of Keytruda and other oncology drugs, Animal Health and new products, which may have been partially offset by lower sales of Gardasil and some other vaccines, generic competition for some drugs like Januvia/Janumet, Bridion and Dificid, IRA price setting and significantly lower sales of Lagevrio.
Performance of Merck’s Oncology Drugs
In oncology drugs, Keytruda sales are likely to have been driven by rapid uptake across earlier-stage indications globally, particularly early-stage non-small cell lung cancer. Continued strong momentum in metastatic indications is also likely to have boosted sales growth. However, the unfavorable timing of wholesaler purchases in the United States hurt Keytruda’s sales in the fourth quarter, which is likely to have reversed in the first quarter. The Zacks Consensus Estimate for Keytruda’s sales is $7.73 billion.
Higher alliance revenues from Lynparza, driven by increased demand, may have boosted oncology sales. Please note that Merck markets Lynparza in partnership with AstraZeneca (AZN - Free Report) .
Merck has a global strategic collaboration with AstraZeneca to co-develop and co-commercialize Lynparza and Koselugo.
Alliance revenues from Lenvima might have also boosted oncology sales.
Sales of the new drug Welireg are likely to have benefited from higher demand in the United States as well as continued launch uptake in certain international markets.
MRK’s Vaccines, Animal Health Segment and Other Drugs
With regard to the HPV vaccine, Gardasil, ex-U.S. sales are expected to have been hurt by lower demand in China and Japan. The Zacks Consensus Estimate for Gardasil is $1.18 billion.
Sales of some other Merck vaccines, like Rotateq, Pneumovax 23 and Vaxneuvance, also declined in the past two quarters, a trend likely to have continued in the first quarter. However, sales of the new vaccine, Capvaxive, are likely to have improved sequentially, driven by demand growth.
In the hospital specialty portfolio, generic competition in certain ex-U.S. markets is likely to have hurt sales of neuromuscular blockade medicine — Bridion injection. However, higher demand is expected to have benefited U.S. sales. The Zacks Consensus Estimate for Bridion is $401.0 million.
Sales of the diabetes franchise (Januvia/Janumet) are expected to have risen as higher net pricing in the United States might have offset lower demand in China and generic competition in most international markets.
New pulmonary arterial hypertension drug, Winrevair’s sales are likely to have gained from continued strong uptake in the United States and early launch uptake in some international markets. However, lower pricing due to Medicare Part D redesign partially offset some of the gains in the past couple of quarters. It remains to be seen if the trend continues in the first quarter.
The Zacks Consensus Estimate for Merck’s Pharmaceutical unit is $14.16 billion. Ohtuvayre, added from the October 2025 acquisition of Verona Pharma, should also have boosted sales growth, backed by strong growth in new patient starts and total patients treated.
In the Animal Health franchise, while sales of livestock products are likely to have increased, those of companion animal products might have declined. The Zacks Consensus Estimate for the Animal Health unit is $1.67 billion.
Earnings per share in the first quarter will likely be impacted by costs related to the acquisition of Cidara Therapeutics, which closed in January, and some other one-time business development charges.
Last month, Merck announced a definitive agreement to acquire California-based cancer biotech, Terns Pharmaceuticals (TERN - Free Report) , for around $6.7 billion. The acquisition will add Terns’ leukemia candidate TERN-701 to its pipeline. The impending acquisition should be a key topic of discussion on the first-quarter conference call. On Friday, Merck announced the expiration of the Hart-Scott-Rodino Act waiting period to acquire Terns and so the deal should close soon.
Nonetheless, a single quarter’s results are not important for long-term investors. Let's delve deeper to understand whether to buy, sell or hold Merck stock.
MRK’s Price Performance & Valuation
Merck shares have risen 34.5% in the past year compared witha return of 9.6% for the industry.
Merck Stock Underperforms Industry
Image Source: Zacks Investment Research
From a valuation standpoint, Merck is slightly expensive. Going by the price/earnings ratio, the company’s shares currently trade at 17.26 forward earnings, higher than 16.43 for the industry. The stock is also trading above its five-year mean of 12.68.
MRK Stock Valuation
Image Source: Zacks Investment Research
Investment Thesis on MRK’s Stock
Merck boasts more than six blockbuster drugs in its portfolio, with Keytruda being the key top-line driver. Keytruda has played an instrumental role in driving Merck’s steady revenue growth over the past few years. Merck expects Keytruda to achieve peak sales of $35 billion by 2028. Merck’s other oncology drugs, Welireg, AstraZeneca-partnered Lynparza and Eisai-partnered Lenvima, are also contributing to top-line growth.
Merck’s Animal Health business is also a key contributor to its top-line growth, with sales expected to more than double by mid-2030s.
The company has been on an acquisition spree in the past year, as it faces the looming patent expiration of Keytruda in 2028. Merck is heavily reliant on Keytruda. Though Keytruda may be Merck’s biggest strength and a solid reason to own the stock, the company is excessively dependent on the drug. Keytruda’s core U.S. patent is expected to expire around 2028, with additional patents expiring slightly after that. Keytruda is expected to face significant biosimilar competition around 2028-2029. Once biosimilars enter, Keytruda’s sales are likely to decline sharply.
Also, competitive pressure might increase for Keytruda in the near future from dual PD-1/VEGF inhibitors that inhibit both the PD-1 pathway and the VEGF pathway at once. They are designed to overcome the limitations of single-target therapies like Keytruda.
Merck’s second-largest product, Gardasil, is also seeing grim sales in China and Japan. Merck is also seeing weakness in the diabetes franchise and the generic erosion of some drugs Isentress/Isentress HD and Bridion in the European Union and Dificid in the United States.
Stay Invested in MRK Stock
Merck has one of the world’s best-selling drugs in its portfolio, generating billions of dollars in revenues. Though Keytruda will lose patent exclusivity in 2028, its sales are expected to remain strong until then. Merck’s new products, Winrevair, Welireg and Capvaxive, key pipeline progress and expansion of its respiratory and infectious disease portfolios through the acquisitions of Verona Pharma and Cidara Therapeutics, have improved its long-term growth prospects.
The new products and strong progress in its pipeline have increased confidence that Merck may be able to maintain growth even after Keytruda loses exclusivity.
Investors may continue retaining this stock and see how the company manages its future product and pipeline growth and replaces Keytruda revenues.
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Buy, Sell or Hold MRK Stock With Q1 Earnings Around the Corner?
Key Takeaways
Merck (MRK - Free Report) is set to report its first-quarter 2026 earnings on April 30, before market open. The Zacks Consensus Estimate for first-quarter top line is pegged at $15.90 billion, while the same for the bottom line stands at a loss of $1.51 per share. Earnings estimates for 2026 have declined from $5.15 to $4.89 per share over the past 30 days.
Earnings Surprise History of Merck
The healthcare bellwether’s performance has been solid, with the company exceeding earnings expectations in each of the trailing four quarters. It delivered a four-quarter earnings surprise of 4.76%, on average. In the last reported quarter, the company delivered an earnings surprise of 0.49%, as seen in the chart below.
What Does Our Model Say for MRK?
Merck has an Earnings ESP of +3.14% and a Zacks Rank #3 (Hold) at present, indicating a likely earnings surprise. You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
Per our proven model, companies with the combination of a positive Earnings ESP and a Zacks Rank #1, #2 (Buy) or #3 have a good chance of delivering an earnings beat. You can uncover the best stocks to buy or sell before they’re reported with our Earnings ESP Filter.
Factors Shaping MRK’s Upcoming Results
Merck’s top-line growth in the first quarter is expected to have been driven by higher sales of Keytruda and other oncology drugs, Animal Health and new products, which may have been partially offset by lower sales of Gardasil and some other vaccines, generic competition for some drugs like Januvia/Janumet, Bridion and Dificid, IRA price setting and significantly lower sales of Lagevrio.
Performance of Merck’s Oncology Drugs
In oncology drugs, Keytruda sales are likely to have been driven by rapid uptake across earlier-stage indications globally, particularly early-stage non-small cell lung cancer. Continued strong momentum in metastatic indications is also likely to have boosted sales growth. However, the unfavorable timing of wholesaler purchases in the United States hurt Keytruda’s sales in the fourth quarter, which is likely to have reversed in the first quarter. The Zacks Consensus Estimate for Keytruda’s sales is $7.73 billion.
Higher alliance revenues from Lynparza, driven by increased demand, may have boosted oncology sales. Please note that Merck markets Lynparza in partnership with AstraZeneca (AZN - Free Report) .
Merck has a global strategic collaboration with AstraZeneca to co-develop and co-commercialize Lynparza and Koselugo.
Alliance revenues from Lenvima might have also boosted oncology sales.
Sales of the new drug Welireg are likely to have benefited from higher demand in the United States as well as continued launch uptake in certain international markets.
MRK’s Vaccines, Animal Health Segment and Other Drugs
With regard to the HPV vaccine, Gardasil, ex-U.S. sales are expected to have been hurt by lower demand in China and Japan. The Zacks Consensus Estimate for Gardasil is $1.18 billion.
Sales of some other Merck vaccines, like Rotateq, Pneumovax 23 and Vaxneuvance, also declined in the past two quarters, a trend likely to have continued in the first quarter. However, sales of the new vaccine, Capvaxive, are likely to have improved sequentially, driven by demand growth.
In the hospital specialty portfolio, generic competition in certain ex-U.S. markets is likely to have hurt sales of neuromuscular blockade medicine — Bridion injection. However, higher demand is expected to have benefited U.S. sales. The Zacks Consensus Estimate for Bridion is $401.0 million.
Sales of the diabetes franchise (Januvia/Janumet) are expected to have risen as higher net pricing in the United States might have offset lower demand in China and generic competition in most international markets.
New pulmonary arterial hypertension drug, Winrevair’s sales are likely to have gained from continued strong uptake in the United States and early launch uptake in some international markets. However, lower pricing due to Medicare Part D redesign partially offset some of the gains in the past couple of quarters. It remains to be seen if the trend continues in the first quarter.
The Zacks Consensus Estimate for Merck’s Pharmaceutical unit is $14.16 billion.
Ohtuvayre, added from the October 2025 acquisition of Verona Pharma, should also have boosted sales growth, backed by strong growth in new patient starts and total patients treated.
In the Animal Health franchise, while sales of livestock products are likely to have increased, those of companion animal products might have declined. The Zacks Consensus Estimate for the Animal Health unit is $1.67 billion.
Earnings per share in the first quarter will likely be impacted by costs related to the acquisition of Cidara Therapeutics, which closed in January, and some other one-time business development charges.
Last month, Merck announced a definitive agreement to acquire California-based cancer biotech, Terns Pharmaceuticals (TERN - Free Report) , for around $6.7 billion. The acquisition will add Terns’ leukemia candidate TERN-701 to its pipeline. The impending acquisition should be a key topic of discussion on the first-quarter conference call. On Friday, Merck announced the expiration of the Hart-Scott-Rodino Act waiting period to acquire Terns and so the deal should close soon.
Nonetheless, a single quarter’s results are not important for long-term investors. Let's delve deeper to understand whether to buy, sell or hold Merck stock.
MRK’s Price Performance & Valuation
Merck shares have risen 34.5% in the past year compared witha return of 9.6% for the industry.
Merck Stock Underperforms Industry
From a valuation standpoint, Merck is slightly expensive. Going by the price/earnings ratio, the company’s shares currently trade at 17.26 forward earnings, higher than 16.43 for the industry. The stock is also trading above its five-year mean of 12.68.
MRK Stock Valuation
Investment Thesis on MRK’s Stock
Merck boasts more than six blockbuster drugs in its portfolio, with Keytruda being the key top-line driver. Keytruda has played an instrumental role in driving Merck’s steady revenue growth over the past few years. Merck expects Keytruda to achieve peak sales of $35 billion by 2028. Merck’s other oncology drugs, Welireg, AstraZeneca-partnered Lynparza and Eisai-partnered Lenvima, are also contributing to top-line growth.
Merck’s Animal Health business is also a key contributor to its top-line growth, with sales expected to more than double by mid-2030s.
The company has been on an acquisition spree in the past year, as it faces the looming patent expiration of Keytruda in 2028. Merck is heavily reliant on Keytruda. Though Keytruda may be Merck’s biggest strength and a solid reason to own the stock, the company is excessively dependent on the drug. Keytruda’s core U.S. patent is expected to expire around 2028, with additional patents expiring slightly after that. Keytruda is expected to face significant biosimilar competition around 2028-2029. Once biosimilars enter, Keytruda’s sales are likely to decline sharply.
Also, competitive pressure might increase for Keytruda in the near future from dual PD-1/VEGF inhibitors that inhibit both the PD-1 pathway and the VEGF pathway at once. They are designed to overcome the limitations of single-target therapies like Keytruda.
Merck’s second-largest product, Gardasil, is also seeing grim sales in China and Japan. Merck is also seeing weakness in the diabetes franchise and the generic erosion of some drugs Isentress/Isentress HD and Bridion in the European Union and Dificid in the United States.
Stay Invested in MRK Stock
Merck has one of the world’s best-selling drugs in its portfolio, generating billions of dollars in revenues. Though Keytruda will lose patent exclusivity in 2028, its sales are expected to remain strong until then. Merck’s new products, Winrevair, Welireg and Capvaxive, key pipeline progress and expansion of its respiratory and infectious disease portfolios through the acquisitions of Verona Pharma and Cidara Therapeutics, have improved its long-term growth prospects.
The new products and strong progress in its pipeline have increased confidence that Merck may be able to maintain growth even after Keytruda loses exclusivity.
Investors may continue retaining this stock and see how the company manages its future product and pipeline growth and replaces Keytruda revenues.