Key Takeaways MRK posted Q4 adjusted EPS of $2.04 and revenues of $16.40B, beating estimates for both metrics.MRK's Q4 revenues grew 5% to $16.40B, led by oncology, new drugs and Animal Health segment.MRK's 2026 outlook falls short of investors' expectations in terms of revenues and earnings.Merck (MRK) reported fourth-quarter 2025 adjusted earnings per share (EPS) of $2.04, which beat the Zacks Consensus Estimate of $2.03. Earnings increased 19% year over year, both on a reported basis and excluding foreig ...

Merck (MRK) reported $16.4 billion in revenue for the quarter ended December 2025, representing a year-over-year increase of 5%. EPS of $2.04 for the same period compares to $1.72 a year ago.The reported revenue represents a surprise of +1.33% over the Zacks Consensus Estimate of $16.19 billion. With the consensus EPS estimate being $2.03, the EPS surprise was +0.62%.While investors closely watch year-over-year changes in headline numbers -- revenue and earnings -- and how they compare to Wall Street expect ...

Core Viewpoint - Merck is expected to report its Q4 and full-year 2025 earnings on February 3, with a consensus estimate of $16.19 billion in sales and $2.04 per share in earnings, but earnings estimates for 2026 have declined significantly due to costs from recent M&A activities [1][7][34] Financial Performance - Merck has consistently exceeded earnings expectations in the past four quarters, with an average earnings surprise of 5.08% and a notable 9.32% surprise in the last quarter [3][34] - The company currently has an Earnings ESP of +0.33% and a Zacks Rank of 4 (Sell) [4] Factors Influencing Upcoming Results - Q4 growth is anticipated from Keytruda, Animal Health, and new drugs, although this may be offset by weaker performance from Gardasil and M&A-related costs [7][34] - Keytruda sales are projected to reach $8.31 billion, driven by strong uptake in early-stage indications and metastatic indications [9][34] - The HPV vaccine Gardasil is expected to see lower sales, particularly in China and Japan, with estimates at $1.04 billion [13][34] - The Animal Health segment is estimated to generate $1.48 billion, with mixed performance in livestock and companion animal products [17][34] Strategic Initiatives - Merck has been active in acquisitions, including Cidara Therapeutics for $9.2 billion and Verona Pharma for around $10 billion, aimed at bolstering its pipeline ahead of Keytruda's patent expiration in 2028 [28][30] - The company is positioned to launch approximately 20 new vaccines and drugs in the coming years, with several having blockbuster potential [27][34] Market Position and Valuation - Merck's stock has increased by 9.4% over the past year, underperforming the industry average of 16.1% [20][34] - The company's shares trade at a forward P/E ratio of 15.62, lower than the industry average of 18.18, but above its five-year mean of 12.48 [23][34] Investment Considerations - While Keytruda remains a significant revenue driver, there are concerns about Merck's reliance on this drug and its ability to diversify its product lineup [31][34] - Short-term investors may be cautious due to challenges such as Gardasil's performance, potential competition for Keytruda, and rising pressures from generics [34]

Core Insights - Merck is set to report its Q4 and full-year 2025 results on February 3, with a focus on the sales performance of its cancer drug Keytruda, which accounted for over 50% of pharmaceutical sales in the first nine months of 2025 [2][11] - Keytruda's sales increased by 8% year over year in Q3 2025, but were below expectations, prompting attention on Merck's non-oncology drugs, particularly Capvaxive and Winrevair, which are expected to drive long-term growth [3][5] Sales Performance - Keytruda's sales performance is critical, with a noted increase of 8% year over year in Q3 2025, but weaker than anticipated [3] - Capvaxive and Winrevair have shown strong sales, with Capvaxive generating $480 million and Winrevair $976 million in the first nine months of 2025 [5][11] - The Animal Health business is also contributing to top-line growth, with expected revenue increases in Q4 [6] Product Approvals and Market Competition - Capvaxive was approved in the U.S. in June 2024 and in the EU in March 2025, while Winrevair was approved for PAH treatment in 2024 [4] - Enflonsia, a new RSV antibody, recorded sales of $79 million in Q3 2025, with its performance in Q4 still uncertain as it moves into broader clinical use [7] - Winrevair faces competition in the PAH market from United Therapeutics and Johnson & Johnson, while Enflonsia competes with AstraZeneca/Sanofi's Beyfortus [8][10] Financial Performance and Valuation - Merck's shares have increased by 30.6% over the past six months, outperforming the industry and the S&P 500 [13] - The company's price/earnings ratio stands at 15.61, which is lower than the industry average of 18.36 but higher than its 5-year mean of 12.48 [14] - The Zacks Consensus Estimate for 2025 earnings per share has slightly decreased from $8.98 to $8.95, and for 2026 from $8.81 to $6.94 over the past 60 days [15]

Core Insights - Merck (MRK) and AbbVie (ABBV) are prominent pharmaceutical companies with strong positions in oncology and immunology, with AbbVie also expanding into aesthetics, neuroscience, and eye care, while Merck has a more diversified portfolio including vaccines and animal health [1] Group 1: Revenue and Growth Drivers - Oncology represents over 60% of Merck's total revenues, with Keytruda accounting for approximately half of its pharmaceutical sales [2] - AbbVie's immunology segment is the largest revenue contributor, with drugs like Humira, Skyrizi, and Rinvoq generating about half of total sales [2] - AbbVie has successfully managed the loss of exclusivity for Humira by launching new immunology drugs, Skyrizi and Rinvoq, which are projected to exceed combined sales of $25 billion in 2025 and $31 billion by 2027 [4][5] Group 2: Financial Performance - AbbVie's oncology segment generated $5.0 billion in revenue in the first nine months of 2025, a 2.7% increase year-over-year, while neuroscience drug sales rose 20.3% to nearly $7.8 billion [6] - Merck's Keytruda achieved sales of $23.3 billion in the first nine months of 2025, reflecting an 8% year-over-year growth [10] - AbbVie's stock has increased by 26.6% over the past year, while Merck's stock has risen by 15% [22] Group 3: Pipeline and M&A Activity - AbbVie has engaged in over 30 M&A transactions since early 2024 to enhance its early-stage pipeline, particularly in immunology [7] - Merck's phase III pipeline has nearly tripled since 2021, with plans to launch around 20 new vaccines and drugs, including a new pneumococcal vaccine and a pulmonary arterial hypertension drug [12] - Merck has been active in acquisitions, including the $9.2 billion purchase of Cidara Therapeutics and around $10 billion for Verona Pharma, to bolster its pipeline [13][14] Group 4: Challenges and Competitive Landscape - AbbVie faces near-term challenges such as biosimilar erosion of Humira and competitive pressures on Imbruvica, with aesthetics sales declining by 7.4% in the first nine months of 2025 [8] - Merck is heavily reliant on Keytruda, with concerns about its ability to grow non-oncology business ahead of Keytruda's patent expiration in 2028 [16] - Both companies are facing competitive pressures, with Merck's Gardasil sales declining due to weak performance in China and other vaccines also experiencing sales drops [15] Group 5: Valuation and Estimates - The Zacks Consensus Estimate for AbbVie's 2026 sales and EPS indicates a year-over-year increase of 10.2% and 38.4%, respectively, while Merck's estimates imply a 3.7% sales increase but a 15.9% decrease in EPS [17] - AbbVie trades at a higher price/earnings ratio of 14.84 compared to Merck's 13.81, although both are below the industry average of 17.75 [22] - AbbVie's dividend yield is 3.06%, slightly lower than Merck's 3.2% [26]

Group 1 - Merck & Co. Inc. (NYSE:MRK) has been upgraded to Outperform by BMO Capital Markets with a raised price target of $130 per share, indicating confidence in the company's growth potential beyond the loss of exclusivity for Keytruda [1] - The company reported a sales beat for Gardasil in Q3 of fiscal 2025, marking its first positive performance in over a year, which alleviated a significant stock overhang [2] - BMO anticipates improved commercial performance from emerging products such as Enflonsia, Reblozyl, and Welireg, highlighting a notable difference between its sales expectations for Enflonsia and current consensus forecasts [3] Group 2 - Merck & Co. Inc. operates in the healthcare sector, providing human health pharmaceuticals, veterinary pharmaceuticals, vaccines, and health management solutions and services [3]

Core Insights - Merck is approaching a significant patent cliff with its leading PD-L1 therapy Keytruda, which is set to lose exclusivity in 2028, accounting for over 50% of the company's pharmaceutical sales and generating $23.3 billion in sales during the first nine months of 2025, an 8% increase year over year [1][9] Product Developments - The FDA approved a subcutaneous formulation of Keytruda, known as Keytruda Qlex, in September 2025, which has its own patents extending beyond 2028, potentially mitigating the impact of Keytruda's loss of exclusivity [2] - Merck is diversifying its portfolio with new products like the 21-valent pneumococcal conjugate vaccine Capvaxive and the pulmonary arterial hypertension (PAH) drug Winrevair, both of which have shown strong sales performance [3][4] - Capvaxive generated $480 million in sales in the first nine months of 2025, while Winrevair achieved $976 million in the same period, with management optimistic about their long-term revenue potential [4][5] Competitive Landscape - The PAH market remains highly competitive, with significant players like United Therapeutics and Johnson & Johnson posing challenges for Winrevair [8][10] - Merck's new RSV antibody Enflonsia faces competition from AstraZeneca/Sanofi's Beyfortus and several approved vaccines for RSV prevention [11] Financial Performance - Year-to-date, Merck's shares have increased by 2.9%, underperforming the industry average of 15.6% [12] - Merck's price/earnings ratio stands at 11.59, which is lower than the industry average of 16.91 and its 5-year mean of 12.54, indicating attractive valuation [13] Earnings Estimates - The Zacks Consensus Estimate for 2025 earnings per share has slightly increased from $8.94 to $8.98, while the estimate for 2026 has decreased from $9.55 to $8.81 over the past 60 days [15]

Core Insights - The competition for the title of "King of Drugs" is intensifying, with Eli Lilly's weight loss drug, Tirzepatide, leading sales in the first three quarters of the year, surpassing Merck's Keytruda [2][3] - Major pharmaceutical companies, including Johnson & Johnson, Roche, and Merck, have raised their annual revenue guidance following strong third-quarter performances [5][6][7] Group 1: Company Performance - Johnson & Johnson reported total revenue of $69.63 billion, leading the industry, with pharmaceutical revenue at $44.64 billion [4] - Eli Lilly achieved pharmaceutical revenue of $45.89 billion, driven by Tirzepatide, which generated $24.8 billion in sales [3][5] - Merck's total revenue reached $48.61 billion, with pharmaceutical revenue at $43.3 billion; however, sales growth for Keytruda has slowed [7] Group 2: Drug Sales Highlights - Tirzepatide's sales for the first three quarters reached $24.84 billion, with a significant increase in sales for its diabetes version, Mounjaro, which saw a 109% year-on-year growth [3] - Keytruda's sales were $23.30 billion, reflecting an 8% growth, but the growth rate is slowing down [7] - Roche's Phesgo saw a 54% increase in sales, contributing to a pharmaceutical revenue of approximately $42.55 billion [6] Group 3: Revenue Guidance Adjustments - Eli Lilly raised its full-year revenue guidance to between $63 billion and $63.5 billion [5] - Johnson & Johnson adjusted its revenue forecast to grow by 4.8% to 5.3%, targeting $93 billion to $93.4 billion [5] - Roche also increased its annual revenue expectations based on strong third-quarter results [6]

Core Insights - Merck (MRK) reported Q3 2025 adjusted EPS of $2.58, exceeding the Zacks Consensus Estimate of $2.36, with a year-over-year increase of 64% on a reported basis and 65% excluding foreign exchange [1][10] - Revenues for Q3 increased by 4% year-over-year to $17.28 billion, surpassing the Zacks Consensus Estimate of $17.06 billion [1][10] Sales Performance of Key Products - Keytruda, Merck's leading oncology drug, generated sales of $8.14 billion, an 8% increase year-over-year, but fell short of the Zacks Consensus Estimate of $8.40 billion [3] - Alliance revenues from Lynparza and Lenvima contributed positively, with Lynparza sales rising 12% to $379 million and Lenvima revenues totaling $258 million, up 2% [4] - Welireg recorded sales of $196 million, reflecting a 41% increase due to higher demand in the U.S. and early uptake in Europe [5] - HPV vaccines, Gardasil and Gardasil 9, saw a 25% decline in sales to $1.75 billion, primarily due to lower demand in China and Japan [6] - Capvaxive, a new pneumococcal vaccine, generated $244 million in sales, up from $129 million in the previous quarter [7] - The diabetes drug franchise, Januvia/Janumet, saw a 29% increase in sales to $624 million, driven by higher net pricing in the U.S. [8] Animal Health Segment - The animal health segment generated revenues of $1.62 billion, a 9% increase year-over-year, driven by higher demand for livestock products [11] 2025 Guidance - Merck narrowed its 2025 sales guidance to $64.5-$65.0 billion, reflecting a slight adjustment from the previous range [12] - Adjusted EPS guidance for 2025 was raised to a range of $8.93 to $8.98, incorporating a revised negative impact from foreign exchange [13] - The updated EPS outlook includes benefits from a revised AstraZeneca deal and improved operations, partially offset by costs from the acquisition of Verona Pharma [14][15] Market Reaction - Despite strong Q3 results, Merck's shares fell over 2% in pre-market trading due to Keytruda's weaker-than-expected sales and the narrowed sales guidance [19]

Core Insights - Merck reported revenue of $17.28 billion for the quarter ended September 2025, reflecting a 3.7% increase year-over-year and a surprise of +1.24% over the Zacks Consensus Estimate of $17.06 billion [1] - Earnings per share (EPS) for the quarter was $2.58, compared to $1.57 in the same quarter last year, resulting in a surprise of +9.32% over the consensus estimate of $2.36 [1] Financial Performance - Hospital Acute Care sales for Bridion in the U.S. reached $392 million, exceeding the estimated $379.07 million, marking a +15.6% change year-over-year [4] - Oncology sales for Keytruda internationally were $3.26 billion, slightly below the estimated $3.33 billion, with a year-over-year increase of +11.4% [4] - Sales for Diabetes drug Janumet in the U.S. were $78 million, significantly surpassing the estimated $42.82 million, representing a +420% change year-over-year [4] - Alliance revenue for Lynparza in the U.S. was $184 million, exceeding the estimated $156.52 million, with a +14.3% year-over-year change [4] - Animal health sales totaled $1.62 billion, above the estimated $1.56 billion, reflecting an +8.6% change year-over-year [4] - Cardiovascular sales for Winrevair were $360 million, below the estimated $426.29 million [4] - Oncology sales for Keytruda were $8.14 billion, slightly below the estimated $8.4 billion, with a +9.6% year-over-year change [4] - Sales for Virology drug Lagevrio were $138 million, below the estimated $144.08 million, representing a -64% year-over-year change [4] - Sales for Gardasil vaccines were $1.75 billion, matching the average estimate, but reflecting a -24.2% year-over-year change [4] - Alliance revenue for Lenvima was $258 million, exceeding the estimated $242.44 million, with a +2.8% year-over-year change [4] Stock Performance - Merck's shares have returned -3.9% over the past month, contrasting with the Zacks S&P 500 composite's +3.6% change [3] - The stock currently holds a Zacks Rank 4 (Sell), indicating potential underperformance relative to the broader market in the near term [3]