Merck & Co., Inc. (MRK) Q1 2026 Earnings Call Transcript
Written by Emily J. Thompson, Senior Investment Analyst
Updated: Apr 30 2026
0mins
Should l Buy MRK?
Source: SeekingAlpha
Revenue $16.3 billion, an increase of 5% year-over-year (3% excluding the impact of foreign exchange). Growth driven by oncology, animal health, and new product contributions.
KEYTRUDA family sales $8 billion, an increase of 8% year-over-year. Growth driven by strong demand from metastatic indications, earlier-stage cancers, and combination use with Padcev in urothelial cancer. U.S. growth benefited by approximately $250 million from timing of purchases.
WELIREG sales $199 million, an increase of 43% year-over-year. Growth driven by ongoing launches in international markets and increased use in advanced renal cell carcinoma in the U.S.
GARDASIL sales $1.1 billion, a decrease of 22% year-over-year. Decline driven by lower demand in China and Japan, and a 10% decline in the U.S. due to timing of CDC purchases, partially offset by price.
CAPVAXIVE sales $142 million, an increase of 31% year-over-year. Growth driven by uptake from ongoing launches in certain markets outside the U.S. and increased demand in the U.S.
WINREVAIR sales $525 million, reflecting strong demand for pulmonary arterial hypertension therapy. U.S. growth driven by new patient prescriptions and increased usage by patients without prostacyclin background therapies.
OHTUVAYRE sales $131 million. Sales impacted by CMS reimbursement changes and Medicare deductible resets. Prescription trends began to recover in March.
Animal Health sales Increased by 6% year-over-year. Livestock sales grew 8% due to higher demand for ruminant and poultry products and price. Companion Animal sales increased 4% due to new product launches and price, partially offset by reduced vet visits.
Gross margin 81.9%, a decrease of 0.3 percentage points year-over-year. Decrease attributed to operational factors.
Operating expenses $15.2 billion, including a $9 billion one-time charge related to the acquisition of Cidara Therapeutics. Excluding this charge, operating expenses grew 2% due to increased investments in growth drivers, partially offset by optimization efforts.
Other expense $318 million, an increase due to financing related to recent business development transactions.
Tax provision $957 million. Tax rate was negative 43.5% due to the non-tax deductible one-time charge for Cidara.
Earnings per share (EPS) Loss of $1.28 per share, including a negative impact of $3.62 per share from the one-time charge related to Cidara.
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Analyst Views on MRK
Wall Street analysts forecast MRK stock price to rise
16 Analyst Rating
11 Buy
5 Hold
0 Sell
Moderate Buy
Current: 112.300
Low
95.00
Averages
119.53
High
139.00
Current: 112.300
Low
95.00
Averages
119.53
High
139.00
About MRK
Merck & Co., Inc. is a global health care company that delivers health solutions through its prescription medicines, including biologic therapies, vaccines and animal health products. Its Pharmaceutical segment includes human health pharmaceutical and vaccine products. The Company sells its human health pharmaceutical products primarily to drug wholesalers and retailers, hospitals, government agencies and managed health care providers. It sells these human health vaccines primarily to physicians, wholesalers, distributors and government entities. Its Animal Health segment discovers, develops, manufactures and markets a range of veterinary pharmaceutical and vaccine products, as well as health management solutions and services, for the prevention, treatment and control of disease in all livestock and companion animal species. Its products include KEYTRUDA (pembrolizumab) injection, for intravenous use; WELIREG (belzutifan) tablets, for oral use; Ohtuvayre (ensifentrine) and others.
About the author
Emily J. Thompson
Emily J. Thompson, a Chartered Financial Analyst (CFA) with 12 years in investment research, graduated with honors from the Wharton School. Specializing in industrial and technology stocks, she provides in-depth analysis for Intellectia’s earnings and market brief reports.
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- Biocatalysis Technology Application: The study details the biocatalytic assembly of Enlicitide using a suite of enzymes, significantly enhancing synthesis efficiency and demonstrating Merck's technical prowess in biocatalysis, which could transform traditional drug synthesis methods and promote sustainability in the pharmaceutical industry.
- Market Demand Response: Enlicitide is designed to lower LDL-C levels by inhibiting interactions with LDL receptors, addressing the growing global demand for cardiovascular disease treatments, especially as cardiovascular-related mortality continues to rise, highlighting its significant market implications.
- Strategic Investment and Commitment: With over 25 years of investment in biocatalysis, Merck is dedicated to developing novel enzymes and manufacturing processes, reflecting the company's long-term commitment to innovative drug development aimed at improving global patient health outcomes.
See More
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- Merck's Strategy: Merck's key drug Keytruda will lose patent protection in 2028, but the approval of a subcutaneous version is expected to retain patients, while new drugs like Winrevair and Capvaxive are performing well in the market.
- Dividend Appeal: Both Amgen and Merck offer around a 3% dividend yield, significantly higher than the S&P 500's average of 1.1%, and both companies have notably increased their dividends over the past decade, attracting income-seeking investors.
See More
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- Workflow Transformation: Daily Command integrates strategies, creative, and measurement frameworks into a single platform, enabling brand teams to access and manage their work in real-time, significantly improving operational efficiency and team collaboration.
- Market Competitive Advantage: In an environment where pharmaceutical marketing budgets are under sustained pressure, agencies adopting Daily Command will be able to showcase their strategic recommendations within brand teams' daily decision-making processes, thereby increasing client retention and ensuring a competitive edge in the future.
- Open Ecosystem: The Daily Command marketplace allows agencies to integrate their proprietary tools and measurement frameworks directly into the system, ensuring that agencies' intellectual property and data partnerships remain intact, thus fostering innovation and collaboration.
See More
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- International Market Expansion: Mounjaro generated $4.2 billion in U.S. sales, up 59%, while international sales skyrocketed from $1.2 billion to $4.4 billion, primarily due to its inclusion in China's National Reimbursement Drug List, indicating strong global growth potential.
- New Drug Launch: The U.S. launch of Foundayo, an anti-obesity pill, has attracted over 20,000 patients and received prescriptions from more than 8,000 physicians, expected to further drive revenue growth amid a large global obesity population.
- Optimistic Future Outlook: Eli Lilly anticipates total revenue of $84.4 billion in 2026, nearing $100 billion by 2027, with strong sales from Mounjaro and Zepbound, positioning the company favorably for investors looking for growth opportunities.
See More
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- Q1 Performance Beat: Merck reported Q1 sales of $8 billion on April 30, exceeding expectations of $7.6 billion, primarily driven by a 12% increase in sales of its cancer immunotherapy Keytruda, highlighting strong market demand.
- Price Target Increase: Morgan Stanley analyst Terence Flynn raised Merck's price target from $109 to $112 while maintaining an 'Equal Weight' rating, reflecting confidence in the company's growth trajectory following the earnings beat.
- Guidance Adjustment: Merck narrowed its 2026 profit guidance to a range of $5.04 to $5.16 per share, with sales expectations between $65.8 billion and $67 billion, indicating a positive outlook for future performance.
- Investment Potential Analysis: While Merck is viewed as a promising investment, Morgan Stanley suggests that certain AI stocks may offer greater upside potential and lower downside risk, urging investors to consider their options carefully.
See More
Salesforce and Merck Collaborate on Unified Customer Platform
- Customer Platform Integration: Salesforce collaborates with Merck Animal Health to build a 360° customer platform using OneCRM, integrating devices, prescriptions, and customer information into a single system, thereby enhancing service convenience and efficiency.
- Enhanced Online Services: The platform is expected to improve Merck Animal Health's online services and customer support, leading to increased customer growth and retention, thereby strengthening market competitiveness.
- Cost and Efficiency Optimization: By leveraging better sales and automation, the system is anticipated to reduce operational costs and improve efficiency, supporting margin growth and enhancing the company's financial health.
- Strategic Collaboration Significance: This partnership not only highlights Salesforce's potential expansion in the healthcare sector but also underscores Merck's commitment to digital transformation, aiming to enhance overall business performance through technological innovation.
See More
