Key insights
- Merck's Q1 earnings are expected to show a loss due to acquisition costs, but revenue is projected to increase slightly. Investors are focused on the launch of Winrevair and its potential to offset future Keytruda revenue decline. Commentary on recent M&A integrations and the Keytruda subcutaneous formulation will also be closely watched. Analyst ratings are generally positive with upside potential.
Merck & Co. is set to report first-quarter earnings Thursday before the market opens, with investors focused on how the pharmaceutical giant is executing its transition away from dependence on blockbuster cancer drug Keytruda ahead of its 2028 patent expiration.
Analysts expect the company to report a loss of $1.48 per share on revenue of $15.89 billion, representing a 2.3% increase in sales from the year-ago period. The anticipated loss marks a sharp reversal from the prior quarter’s $2.04 per-share profit, likely reflecting acquisition-related charges from Merck’s recent deal-making spree.
Wall Street’s outlook has turned more cautious heading into the print. EPS estimates have declined 12.4% over the past two months, though they’ve ticked up slightly in the past week. Revenue estimates have remained largely flat over the same periods.
Analysts rate the stock a Buy, with a mean price target of $129.74 implying 17.9% upside from the current $110.03 share price. Recent upgrades include UBS raising its target to $145 and JPMorgan lifting its outlook to $135.
What Investors Are Watching
The biggest question is how aggressively Winrevair, Merck’s pulmonary arterial hypertension therapy, is ramping following encouraging data from the CADENCE trial in heart failure patients. Analysts cite the drug as a critical growth driver with multi-billion-dollar peak sales potential that could help offset Keytruda’s eventual decline.
Investors will also parse commentary on Merck’s recent M&A integration. The company cleared regulatory hurdles for its $6.7 billion acquisition of Terns Pharmaceuticals on April 24, adding to earlier deals for Verona Pharma and Cidara Therapeutics. Wall Street wants to hear how products like Ohtuvayre and experimental flu drug CD388 will accelerate revenue diversification.
Keytruda franchise dynamics remain in focus. The subcutaneous formulation, Keytruda Qlex, received a permanent J-code on April 1, and analysts expect management to detail early adoption trends. With upcoming data presentations at ASCO for antibody-drug conjugates and China trial results, the oncology pipeline’s depth will be scrutinized.
Finally, investors will listen for updates on late-stage assets including enlicitide, an oral PCSK9 inhibitor expected to launch later this year, and tulisokibart, an anti-TL1A antibody facing increasing competition in inflammatory bowel disease ahead of Phase 3 data readouts.
Prior Quarter Performance
In February, Merck met fourth-quarter EPS expectations of $2.04 on revenue of $16.4 billion, slightly ahead of the $16.18 billion consensus. The results underscored steady execution on key franchises, though management’s conservative 2026 guidance disappointed some investors.
The question Thursday is whether Merck can demonstrate that its aggressive portfolio reshaping is generating near-term momentum even as the industry braces for the biggest patent cliff in pharmaceutical history.
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