Merck & Co., Inc. operates as a healthcare company worldwide. It operates through two segments, Pharmaceutical and Animal Health. The Pharmaceutical segment offers human health pharmaceutical products in the areas of oncology, hospital acute care, immunology, neuroscience, virology, cardiovascular, and diabetes under the Keytruda, Bridion, Adempas, Lagevrio, Belsomra, Simponi, and Januvia brands, as well as vaccine products consisting of preventive pediatric, adolescent, and adult vaccines under the Gardasil/Gardasil 9, ProQuad, M-M-R II, Varivax, RotaTeq, Live Oral, Vaxneuvance, Pneumovax 23, and Vaqta names. The Animal Health segment discovers, develops, manufactures, and markets veterinary pharmaceuticals, vaccines, and health management solutions and services, as well as digitally connected identification, traceability, and monitoring products. The company serves drug wholesalers and retailers, hospitals, and government agencies; managed health care providers, such as health maintenance organizations, pharmacy benefit managers, and other institutions; and physicians, wholesalers, government entities, veterinarians, distributors, animal producers, farmers, and pet owners. It has development and commercialization agreement for three of Daiichi Sankyo's deruxtecan ADC candidates, which include patritumab deruxtecan, ifinatamab deruxtecan, and raludotatug deruxtecan for the treatment of multiple solid tumors both as monotherapy and/or in combination with other treatments; and AstraZeneca PLC to co-development and co-commercialize AstraZeneca's Lynparza products for multiple cancer types, and Koselugo for multiple indications. The company also has a collaboration agreement with Eisai Co., Ltd., Bayer AG, and Ridgeback Biotherapeutics LP, as well Moderna, Inc. Merck & Co., Inc. was founded in 1891 and is headquartered in Rahway, New Jersey.

Merck выглядит как качественный, но уже не дешёвый защитный актив: операционная рентабельность и отдача на капитал остаются очень сильными, однако часть мультипликаторов уже отражает этот уровень качества. P/E на 29.6% ниже медианы отрасли поддерживает идею умеренной недооценки по прибыли, но P/S и особенно P/B заметно выше отраслевых ориентиров, что ограничивает потенциал переоценки. P/FCF находится около медианы, то есть свободный денежный поток не даёт явного дисконта, а значит рынок оценивает бизнес достаточно близко к справедливой стоимости. Сильная сторона компании — высокая ROE, ROA и ROI, причём все три метрики существенно выше отрасли и остаются на высоких уровнях по годам, что говорит о хорошей эффективности капитала. Маржа также впечатляет: операционная и чистая маржа значительно выше медианы, а валовая маржа остаётся высокой, хотя в последнем периоде она немного снизилась относительно предыдущих кварталов. С другой стороны, EPS и прогноз EPS выглядят слабо в текущем TTM-срезе, что создаёт риск для краткосрочной оценки и объясняет осторожность в пересмотре цели. Долговая нагрузка не критична, но debt/equity выше отраслевой медианы, а долгосрочный долг вырос, поэтому баланс нельзя назвать безрисковым. Ликвидность приемлемая: current ratio и quick ratio находятся выше единицы, но ниже типичных отраслевых ориентиров, что оставляет запас прочности, но не делает картину идеальной. Выручка, активы, капитал и денежные остатки в целом выросли, что поддерживает фундаментальную устойчивость и способность финансировать развитие. При этом дивидендная доходность снизилась до нуля в последнем TTM-срезе, поэтому дивидендный аргумент сейчас слабее, чем раньше. В сумме фундаментал остаётся сильным, но сочетание дорогих по балансу мультипликаторов и ухудшения части прибыльных показателей ограничивает апсайд. Для инвестора это скорее история про качественную компанию с устойчивой операционной базой, чем про явную недооценку, поэтому целесообразен лишь умеренно осторожный пересмотр оценки.

Merck & Company, Inc.

Сильный индекс, значительно упал. Быки в растерянности.

Strong index, significantly down. The bulls are confused.

Слабый индекс, значительно упал. Рынок не поддерживает быков.

Weak index, significantly down. The market does not support the bulls.

Слабый индекс, незначительно вырос

Сильная рентабельность и рост базы поддерживают MRK, но дорогие P/B и P/S, слабый TTM EPS и рост долга ограничивают потенциал переоценки.

Bristol Myers Squibb BMY is navigating a revenue mix shift as growth products portfolio now assumes a larger role in the business, helping mitigate the impact of declining sales from mature products facing generics.
The growth portfolio — including Opdivo, Opdivo Qvantig, Orencia, Yervoy, Reblozyl, Camzyos, Breyanzi, Opdualag, Zeposia, Sotyku, Krazati and Cobenfy — is becoming central to top-line resilience. Sales from this segment rose 12% in the first quarter of 2026, lifting its contribution to 54% of total revenues from 49.7% in the first quarter of 2025. This shift signals improving revenue durability and supports a more favorable long-term growth outlook.
Within this mix, Reblozyl, Breyanzi, Opdualag, Qvantig and Cobenfy propelled growth in the first quarter.
Opdivo Qvantig (nivolumab and hyaluronidase-nvhy- subcutaneous formulation) has witnessed strong uptake across all approved tumor types in the United States.
Other key drugs are contributing to revenue growth, though at varying stages of maturity.
Opdualag sales remain robust, particularly in the United States, where it continues to serve as a standard of care in first-line melanoma.
Reblozyl recorded strong sales growth, driven by continued adoption in both first-line and second-line treatment settings for patients with myelodysplastic syndrome (MDS)-associated anemia.
Breyanzi continues to deliver solid growth, driven by ongoing uptake across its approved large B-cell lymphoma indications in both the United States and international markets. The strong performance highlights sustained demand for the therapy and supports expectations for continued commercial expansion.
Camzyos continues to gain traction in the cardiovascular market, supported by growing demand and increased adoption among eligible patients.
In immunology, Sotyktu remains an important growth driver. The recent approval in psoriatic arthritis expands its commercial opportunity and strengthens BMY’s presence in rheumatology. Additional upside could come from ongoing phase III programs in systemic lupus erythematosus and Sjögren’s disease, which may further broaden the drug’s addressable market, if successful.
Newer therapies like Cobenfy also add optionality to the long-term story, with early launch traction and potential label expansions positioning it as a future growth lever.
The transition is not without challenges. The legacy portfolio — including Eliquis, Revlimid, Pomalyst, Sprycel and Abraxane — still represents 46% of revenues and continues to face significant erosion due to loss of exclusivity for four drugs (Revlimid, Pomalyst, Sprycel and Abraxane).
BMY’s Competition in Oncology Space
Oncology is a key therapeutic area of focus for Bristol Myers, which is developing and delivering transformational medicines in this space.
The company competes with big pharma giants like Merck MRK and Pfizer PFE in this space.
The immuno-oncology space is dominated by pharma giant MRK’s blockbuster drug Keytruda (pembrolizumab).
Keytruda is approved for several types of cancer and alone accounts for around 55% of MRK’s pharmaceutical sales. Merck is currently working on different strategies to drive long-term growth of Keytruda.
Pfizer is one of the largest and most successful drugmakers in the field of oncology. It has an innovative oncology product portfolio of antibody-drug conjugates (ADCs), small molecules, bispecifics and other immune-oncology biologics that treat a wide range of cancers, including breast cancer, gastrointestinal cancer, genitourinary cancer, hematology-oncology, and thoracic cancers, which includes lung cancer.
Pfizer’s position in oncology was strengthened with the addition of Seagen.
The company inked a licensing agreement with 3SBio for the development, manufacturing and commercialization of SSGJ-707, a bispecific antibody targeting PD-1 and VEGF, outside China.
BMY’s Price Performance, Valuation & Estimates
Shares of Bristol Myers have gained 5.5% year to date against the industry’s decline of 3.9%.
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From a valuation standpoint, BMY is trading at a discount to the large-cap pharma industry. Going by the price/earnings ratio, shares currently trade at 9.17x forward earnings, higher than its mean of 8.59x but lower than the large-cap pharma industry’s 17.67x.
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The Zacks Consensus Estimate for 2026 EPS has moved north to $6.32 from $6.29 in the past 60 days, while that for 2027 has moved south to $6.05 from $6.09 in the same time frame.
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BMY currently carries a Zacks Rank #3 (Hold). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
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Can Bristol Myers' Growth Portfolio Offset Legacy Drug Declines?

Phibro Animal Health Corporation PAHC is drawing investor attention because its growth story is increasingly tied to Animal Health, the company’s largest and most strategically important business. The segment now anchors the revenue base, while vaccines, medicated feed additives (MFA) and nutritional specialties give Phibro multiple avenues for expansion.
The stock’s near-term setup depends on whether this segment can keep offsetting risks from regulation, currency swings and uneven demand in smaller businesses.
Here’s a look at Phibro’s stock performance over the past 12 months.
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PAHC’s Growth Engine Inside Animal Health
Animal Health accounted for 74% of Phibro’s total revenues in fiscal 2025, making it the company’s clear growth engine. The segment grew 36% from fiscal 2024, reflecting the strength of a broader product platform across MFAs, nutritional specialty products and vaccines. The company develops, manufactures and markets more than 550 product presentations in this business, giving it a wide base of customers and species exposure.
For investors, the focus is simple. If Animal Health continues to grow, it can help Phibro absorb volatility in Mineral Nutrition and Performance Products while supporting a higher-quality earnings base.
Phibro’s MFA Franchise Gets a Bigger Runway
Phibro’s MFA franchise remains central to the Animal Health story, with its leading Stafac/V-Max/Eskalin platform is approved in more than 30 countries. The integration of Zoetis Inc.’s ZTS MFA business has brought more than 37 established product lines marketed across approximately 80 countries, along with six manufacturing sites in the United States, Italy and China.
That broader footprint expands Phibro’s ability to serve customers across regions and supports a larger recurring revenue base. This added scale is important because it does not rely on a single product or geography.
PAHC’s Q3 Segment Mix Shows the Momentum
The fiscal third-quarter 2026 results showed how that platform is translating into revenue momentum. Animal Health net sales increased 13% year over year to $291.2 million, ahead of the internal model projection of $265.7 million.
The acquired MFA business generated a full quarter of revenues and grew 25% over the prior-year period. Legacy MFA sales increased 5%, helped by demand in North America and certain antimicrobials sold by the Ethanol Performance business. Nutritional specialty product sales rose 8% on higher North America demand and higher companion animal sales.
Vaccines net sales were up 16% year over year. That segment mix supported management’s updated fiscal 2026 outlook, including net sales of $1.46 billion to $1.50 billion and adjusted EBITDA of $247 million to $255 million.
Phibro’s Vaccines Add a Differentiated Growth Vector
Phibro’s vaccine business gives Animal Health a growth avenue that differs from mature feed additive categories. In fiscal third-quarter 2026, vaccine sales rose 16%, driven by higher international demand, including Israel, along with stronger domestic swine demand and increased sales of autogenous vaccines.
The business includes approximately 50 product lines for poultry disease prevention, covering areas such as Infectious Bursal Disease, Infectious Bronchitis, Newcastle Disease, Reovirus, Salmonella and Coryza. As disease pressures shift, vaccines can become a more differentiated part of the portfolio because they are less exposed to generic competition than some feed additive categories.
Phibro is also investing in vaccine manufacturing capacity, including its production facility in Guarulhos, Brazil. That capacity expansion supports volume growth and broader access across geographies.
PAHC’s Global Footprint Helps Smooth Species Cycles
Phibro’s international reach adds another layer to the Animal Health case. The company markets nearly 770 product lines in more than 80 countries to about 4,000 customers, with operations focused on regions where livestock production is concentrated in large commercial farms.
That strategy supports product adoption and recurring demand. In fiscal third-quarter 2026, net sales rose 14% year over year in Europe, the Middle East and Africa, 9% in Asia Pacific, and 7% in Latin America and Canada.
Take a look at Phibro’s valuation.
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Large peers such as Zoetis and Merck & Co., Inc. MRK also show how broad animal health platforms can benefit from scale, product depth and geographic reach, though Phibro’s mix remains more concentrated around its own feed additive, vaccine and nutrition strengths.
Phibro’s Outlook Balances Tailwinds With Known Risks
Phibro’s Health growth is being supported by the Zoetis MFA portfolio, steady legacy demand and higher vaccine volumes. Management also raised the low end of full-year expectations, a sign that recent execution has improved visibility. Yet, Brazil’s antimicrobial transition creates uncertainty for virginiamycin and bacitracin, while Mecadox remains under regulatory and legal scrutiny. Foreign exchange can also add earnings volatility, with fiscal third-quarter results including $1.9 million of foreign currency losses. Competition is another factor.
PAHC carries a Zacks Rank #2 (Buy), but the path is likely to remain uneven if Brazil disruption, currency pressure or generic competition weigh on the Animal Health growth engine.
You can see the complete list of today's Zacks #1 Rank (Strong Buy) stocks here.
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PAHC Stock: What's Driving Phibro's Animal Health Growth

Mergers and acquisitions (M&A) activity across pharmaceutical and biotech sectors has accelerated significantly in 2026, extending the strong recovery that began in 2025.
A recent surge in dealmaking underscores the industry’s focus on portfolio expansion and continuous pipeline innovation, alongside a growing emphasis on AI-driven drug discovery. Oncology and immuno-oncology companies have always been at the top of acquisition targets. Major players are actively pursuing licensing agreements and collaborations around promising drugs and candidates to further strengthen and diversify their core portfolios.
Quick Take on Recent M&A Deals
Pharma conglomerate Johnson & Johnson recently announced that it will acquire Firefly Bio for $1 billion and gain access to its Firelink degrader antibody conjugate platform. The deal strengthens Johnson & Johnson’s oncology pipeline by adding a targeted approach for KRAS-driven cancers, supporting its efforts to develop treatments for some of the most common and challenging solid tumors.
Other pharma giants Eli Lilly LLY and Novartis NVS have been on an acquisition spree this year.
Lilly recently announced agreements to acquire Curevo, LimmaTech Biologics, and Vaccine Company, expanding its infectious disease research and development capabilities.
Lilly has been actively expanding its pipeline through acquisitions. LLY is all set to acquire Ajax Therapeutics, which will add AJ1-11095, a potential first-in-class oral type II JAK2 inhibitor currently in phase I testing for myelofibrosis patients previously treated with type I JAK2 inhibitors, to its pipeline. The company also announced a deal to acquire clinical-stage biotechnology company Kelonia Therapeutics, Inc, a pioneer in vivo gene delivery.
The company had earlier agreed to acquire Centessa Pharmaceuticals for up to $7.8 billion, which will add orexin-based sleep disorder candidate cleminorexton to its pipeline. Lilly also struck a deal worth up to $2.4 billion for Orna Therapeutics, to gain access to its circular RNA-based immune cell engineering platform. Lilly also acquired Ventyx Biosciences to strengthen its portfolio of oral therapies targeting inflammatory diseases.
Swiss pharma bigwig Novartis, too, has been very active on the M&A front. NVS is set to acquire Excellergy Inc., strengthening its immunology pipeline with a focus on food allergies and other IgE-mediated conditions. The deal brings in EXL-111, a phase I, half-life-extended anti-IgE antibody.
Earlier this year, Novartis acquired Avidity Biosciences, adding its antibody oligonucleotide conjugate (AOC) platform and three late-stage programs, further bolstering its neuromuscular pipeline.
Last month, Merck MRK acquired Terns Pharmaceuticals for $53 per share in cash. The deal adds TERN-701, a potential best-in-class treatment for chronic myeloid leukemia that recently received FDA Breakthrough Therapy Designation. The acquisition strengthens Merck’s oncology pipeline.
Among biotech giants, Gilead Sciences, Inc. GILD is ramping up its external innovation strategy through targeted acquisitions to strengthen its pipeline and reduce reliance on its core HIV franchise.
Gilead and partner Lakefront Biotherapeutics (formerly known as Galapagos) recently acquired Ouro Medicines, adding gamgertamig, a clinical-stage BCMAxCD3 T-cell engager, to strengthen their autoimmune disease and inflammation pipeline.
Last month, Gilead acquired Tubulis, a clinical-stage biotech focused on developing next-generation antibody-drug conjugates (ADCs), strengthening its oncology pipeline.
Earlier this year, GILD acquired Arcellx for about $7.8 billion. The acquisition gives Gilead full ownership of anito-cel, an investigational late-stage CAR-T therapy for multiple myeloma with a potential U.S. decision by December 2026.
Another biotech giant Biogen recently acquired Apellis Pharmaceuticals $41 per share in cash plus contingent value rights worth up to an additional $4 per share tied to future sales milestones. The acquisition adds two commercialized therapies, Empaveli and Syfovre, to Biogen’s portfolio. Together, the drugs generated $689 million in sales in 2025. The transaction strengthens Biogen’s presence in immunology and rare diseases while establishing a foothold in nephrology.
Earlier this week, GSK plc GSK announced that it will acquire clinical-stage biopharmaceutical company Nuvalent for $10.6 billion, gaining three lung cancer assets, including late-stage ROS1 inhibitor zidesamtinib and ALK inhibitor neladalkib, both under FDA review. The deal strengthens GSK’s oncology pipeline, expands its presence in lung cancer, and is expected to contribute to sales and operating profit growth beginning in 2027.
GSK earlier acquired RAPT Therapeutics to strengthen its immunology pipeline. The company also bought 35Pharma, adding HS235, a potential best-in-class therapy for pulmonary hypertension.
Last week, Servier (an independent international pharmaceutical group governed by a foundation) agreed to acquire the muscular dystrophy business of Edgewise Therapeutics in a deal worth up to $2.65 billion, including $1.55 billion upfront and up to $1.1 billion in milestone payments.
Road Ahead in 2026
Consolidation remains a key theme as companies seek to offset patent cliffs and diversify revenue streams. Acquisitions offer a faster, less risky route than in-house development, especially as innovation cycles shorten.
With strong cash reserves and increasing adoption of advanced technologies like AI, M&A activity is expected to remain robust through 2026. Smaller biotechs, often constrained by funding, will likely remain prime acquisition targets, further fueling deal momentum.
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Pharma and Biotech M&A Boom Accelerates as Companies Expand Pipelines

For Immediate Release
Chicago, IL – June 11, 2026 – Zacks.com announces the list of stocks featured in the Analyst Blog. Every day the Zacks Equity Research analysts discuss the latest news and events impacting stocks and the financial markets. Stocks recently featured in the blog include: Merck & Co., Inc. MRK, The Southern Co. SO, Lumentum Holdings Inc. LITE and Peoples Bancorp of North Carolina, Inc. PEBK.
Here are highlights from Wednesday’s Analyst Blog:
Top Research Reports for Merck, Southern Company and Lumentum
The Zacks Research Daily presents the best research output of our analyst team. Today's Research Daily features new research reports on 16 major stocks, including Merck & Co., Inc., The Southern Co. and Lumentum Holdings Inc., as well as a micro-cap stock Peoples Bancorp of North Carolina, Inc.. The Zacks microcap research is unique as our research content on these small and under-the-radar companies is the only research of its type in the country.
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Today's Featured Research Reports
Merck's shares have outperformed the Zacks Large Cap Pharmaceuticals industry over the past year (+53.3% vs. +25.2%). The company's blockbuster drug, Keytruda, and new products have been driving sales. Animal Health is also contributing to growth. 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 and oncology portfolios through the acquisitions of Verona Pharma, Cidara Therapeutics and Terns Pharmaceuticals have improved its long-term growth prospects. This progress has increased confidence that Merck can maintain growth even after Keytruda loses exclusivity.
However, it faces several near-term challenges, including persistent challenges for Gardasil in China, potential competition for Keytruda, and rising competitive and generic pressure on some of its drugs.
(You can read the full research report on Merck here >>>)
Shares of Southern Company have gained +7.1% over the past year against the Zacks Utility - Electric Power industry's gain of +23.2%. The company is a leading U.S. electric utility with a stable, recession-resistant business model, benefiting from strong electricity demand growth, particularly from data centers and hyperscale customers, and a robust pipeline exceeding 75 gigawatts of potential projects.
Southern Company is expanding its regulated generation and transmission assets, investing in battery storage and renewable projects, and maintaining a 25-year streak of dividend increases, appealing to income-focused investors.
However, elevated leverage with $67.1 billion in long-term debt, capital-intensive infrastructure needs, exposure to economic slowdowns, regulatory risks, ongoing depreciation charges, and weather-driven earnings volatility limit financial flexibility. Hence, investors are advised to wait for a better entry point.
(You can read the full research report on Southern Company here >>>)
Lumentum's shares have outperformed the Zacks Communication - Components industry over the past year (+968.3% vs. +313.6%). The company is benefiting from sustained AI and cloud network buildouts, with record fiscal Q3 revenue and expanding profitability as laser chips and cloud transceivers scale.
Management's Q4 outlook calls for another step up in revenue and operating margin, supported by continued EML growth, scale-across components like pump and narrow linewidth lasers, and a ramp in 1.6T transceivers with initial internal CW laser integration. A multiyear OCS purchase agreement and the acquisition of an additional indium phosphide fab, backed by a larger cash balance, extend capacity and visibility, while CPO development moves toward revenue.
However, supply constraints and outsourcing dependence can delay shipments, and ongoing ASP and customer concentration risks remain a headwind. Industrial lasers remain muted and can dilute the mix.
(You can read the full research report on Lumentum here >>>)
Shares of Peoples Bancorp of North Carolina have outperformed the Zacks Banks - Southeast industry over the past year (+66.1% vs. +15.4%). This microcap company with a market capitalization of $236.97 million has its investment thesis supported by improving earnings power, driven by balance-sheet management, loan growth and a stable deposit franchise. Margin expansion reflects effective asset-liability management and favorable funding dynamics, while loan growth continues to support revenue generation.
Strong capital levels and a conservative dividend policy provide flexibility to support future growth and shareholder returns. However, key risks include rising operating expenses, potential margin compression from higher funding costs and higher credit costs tied to portfolio growth.
Fee income remains sensitive to appraisal-related activity. Valuation reflects investor caution around the sustainability of earnings growth and credit performance. Further upside will depend on sustaining profitability, maintaining credit quality and delivering consistent earnings growth.
(You can read the full research report on Peoples Bancorp of North Carolina here >>>)
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Past performance is no guarantee of future results. Inherent in any investment is the potential for loss. This material is being provided for informational purposes only and nothing herein constitutes investment, legal, accounting or tax advice, or a recommendation to buy, sell or hold a security. No recommendation or advice is being given as to whether any investment is suitable for a particular investor. It should not be assumed that any investments in securities, companies, sectors or markets identified and described were or will be profitable. All information is current as of the date of herein and is subject to change without notice. Any views or opinions expressed may not reflect those of the firm as a whole. Zacks Investment Research does not engage in investment banking, market making or asset management activities of any securities. These returns are from hypothetical portfolios consisting of stocks with Zacks Rank = 1 that were rebalanced monthly with zero transaction costs. These are not the returns of actual portfolios of stocks. The S&P 500 is an unmanaged index. Visit https://www.zacks.com/performance for information about the performance numbers displayed in this press release.
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Merck & Co., Inc. (MRK) : Free Stock Analysis Report
The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.

The Zacks Analyst Blog Highlights Merck, The Southern, Lumentum and Peoples Bancorp of North Carolina

Merck (MRK) has recently been on Zacks.com's list of the most searched stocks. Therefore, you might want to consider some of the key factors that could influence the stock's performance in the near future.
Over the past month, shares of this pharmaceutical company have returned -5.7%, compared to the Zacks S&P 500 composite's +1.7% change. During this period, the Zacks Large Cap Pharmaceuticals industry, which Merck falls in, has lost 11.9%. The key question now is: What could be the stock's future direction?
Although media reports or rumors about a significant change in a company's business prospects usually cause its stock to trend and lead to an immediate price change, there are always certain fundamental factors that ultimately drive the buy-and-hold decision.
Earnings Estimate Revisions
Here at Zacks, we prioritize appraising the change in the projection of a company's future earnings over anything else. That's because we believe the present value of its future stream of earnings is what determines the fair value for its stock.
Our analysis is essentially based on how sell-side analysts covering the stock are revising their earnings estimates to take the latest business trends into account. When earnings estimates for a company go up, the fair value for its stock goes up as well. And when a stock's fair value is higher than its current market price, investors tend to buy the stock, resulting in its price moving upward. Because of this, empirical studies indicate a strong correlation between trends in earnings estimate revisions and short-term stock price movements.
Merck is expected to post earnings of $1.86 per share for the current quarter, representing a year-over-year change of +6,100%. Over the last 30 days, the Zacks Consensus Estimate has changed -2.3%.
The consensus earnings estimate of $7.72 for the current fiscal year indicates a year-over-year change of +411.3%. This estimate has changed -0.8% over the last 30 days.
For the next fiscal year, the consensus earnings estimate of $9.43 indicates a change of +22.1% from what Merck is expected to report a year ago. Over the past month, the estimate has changed -2.1%.
With an impressive externally audited track record, our proprietary stock rating tool -- the Zacks Rank -- is a more conclusive indicator of a stock's near-term price performance, as it effectively harnesses the power of earnings estimate revisions. The size of the recent change in the consensus estimate, along with three other factors related to earnings estimates, has resulted in a Zacks Rank #3 (Hold) for Merck.
The chart below shows the evolution of the company's forward 12-month consensus EPS estimate:
12 Month EPS
Projected Revenue Growth
Even though a company's earnings growth is arguably the best indicator of its financial health, nothing much happens if it cannot raise its revenues. It's almost impossible for a company to grow its earnings without growing its revenue for long periods. Therefore, knowing a company's potential revenue growth is crucial.
In the case of Merck, the consensus sales estimate of $15.55 billion for the current quarter points to a year-over-year change of +6.3%. The $64.06 billion and $66.97 billion estimates for the current and next fiscal years indicate changes of +6.6% and +4.5%, respectively.
Last Reported Results and Surprise History
Merck reported revenues of $16.66 billion in the last reported quarter, representing a year-over-year change of +4.4%. EPS of $1.57 for the same period compares with $2.13 a year ago.
Compared to the Zacks Consensus Estimate of $16.55 billion, the reported revenues represent a surprise of +0.65%. The EPS surprise was +4.67%.
The company beat consensus EPS estimates in each of the trailing four quarters. The company topped consensus revenue estimates three times over this period.
Valuation
No investment decision can be efficient without considering a stock's valuation. Whether a stock's current price rightly reflects the intrinsic value of the underlying business and the company's growth prospects is an essential determinant of its future price performance.
Comparing the current value of a company's valuation multiples, such as its price-to-earnings (P/E), price-to-sales (P/S), and price-to-cash flow (P/CF), to its own historical values helps ascertain whether its stock is fairly valued, overvalued, or undervalued, whereas comparing the company relative to its peers on these parameters gives a good sense of how reasonable its stock price is.
The Zacks Value Style Score (part of the Zacks Style Scores system), which pays close attention to both traditional and unconventional valuation metrics to grade stocks from A to F (an An is better than a B; a B is better than a C; and so on), is pretty helpful in identifying whether a stock is overvalued, rightly valued, or temporarily undervalued.
Merck is graded B on this front, indicating that it is trading at a discount to its peers. Click here to see the values of some of the valuation metrics that have driven this grade.
Bottom Line
The facts discussed here and much other information on Zacks.com might help determine whether or not it's worthwhile paying attention to the market buzz about Merck. However, its Zacks Rank #3 does suggest that it may perform in line with the broader market in the near term.
Research Chief Names "Single Best Pick to Double"
From thousands of stocks, 5 Zacks experts each have chosen their favorite to skyrocket +100% or more in months to come. From those 5, Director of Research Sheraz Mian hand-picks one to have the most explosive upside of all.
This company targets millennial and Gen Z audiences, generating nearly $1 billion in revenue last quarter alone. A recent pullback makes now an ideal time to jump aboard. Of course, all our elite picks aren’t winners but this one could far surpass earlier Zacks’ Stocks Set to Double like Nano-X Imaging which shot up +129.6% in little more than 9 months.
Free: See Our Top Stock And 4 Runners Up
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To read this article on Zacks.com click here.
The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.

Investors Heavily Search Merck & Co., Inc. (MRK): Here is What You Need to Know

Phibro Animal Health Corporation PAHC is trading at a forward earnings multiple that looks discounted versus key benchmarks, even after a volatile year for the shares. The latest quarter showed improving execution in the core Animal Health segment, with vaccines and the Zoetis medicated feed additive portfolio supporting growth.
The setup now comes down to whether operational momentum can hold through fiscal 2026 while investors weigh regulatory and currency risk against a clearly defined valuation framework.
PAHC’s Setup: Price, Target, and Recent Moves
PAHC last traded at $31.18 as of June 10, 2026, with a 6–12-month price target of $33.00. The stock is down 16.6% year to date but up 27.2% over the past 12 months, a split performance backdrop that puts extra focus on near-term fundamentals.
Image Source: Zacks Investment Research
That price action stands out against broader comparisons. The Zacks sub-industry is down 21.7% year to date and down 28.4% over the past year, while the Zacks Medical sector is down 3.7% year to date and up 2.9% over the past year. The S&P 500 is up 8.1% year to date and up 25.9% over the past year.
Phibro’s Earnings Reset After a Strong Q3 Beat
Phibro posted adjusted earnings per share of $0.76 in fiscal third-quarter 2026 versus $0.64 in the prior-year quarter, beating consensus by 5.92%. Revenue rose 10.3% year over year to $383.5 million, also ahead of consensus by 6.26%.
Animal Health segment net sales increased 13% to $291.2 million, supported by medicated feed additives, nutritional specialties, and vaccines. Within that mix, the acquired medicated feed additive business delivered a full quarter of contribution and grew 25% year over year, while legacy medicated feed additive sales rose 5% on North America demand and certain antimicrobials sold by the Ethanol Performance business.
Nutritional specialty product sales increased 8% on higher North America demand and higher companion animal sales, and vaccine sales rose 16% on higher international demand, including Israel, plus stronger domestic swine demand and autogenous vaccine sales. Mineral Nutrition also contributed, with net sales up 10% to $73.4 million on higher zinc and trace mineral demand, even as Performance Products declined 17% due to softer personal care ingredient demand.
PAHC’s Margins Expanded Despite Higher Costs
The quarter also delivered a cleaner margin profile, showing that mix and operating execution can offset cost pressure. Gross profit rose 20.2% year over year to $125.6 million, and gross margin expanded 271 basis points (bps) to 32.8%. That improvement came despite a 6% increase in cost of goods sold, underscoring the role of product and segment mix in the quarter’s profitability.
Below the gross line, operating leverage improved even with higher overhead. Selling, general and administrative expenses were $81 million, up 13.9% year over year, but operating profit still increased 33.5% to $44.6 million. Operating margin expanded 203 bps to 11.6%, aligning the earnings beat with tangible profitability progress.
Phibro’s 2026 Guidance Define the Base Case
Management updated fiscal 2026 guidance with tighter signposts for the operating path ahead. Net sales are expected in a $1.46–$1.50 billion range, implying 14% growth, and adjusted earnings per share are expected at $2.98–$3.10, implying a 45% improvement versus fiscal 2025.
Operationally, that framework leans on continued Animal Health execution and a steadier Mineral Nutrition trajectory. Animal Health growth has been supported by the Zoetis medicated feed additive portfolio, steady legacy demand, and higher vaccine volumes that broaden the revenue base. Mineral Nutrition volumes have been recovering on zinc and trace mineral demand, which helps utilization and supports a more stable sales base, even if margins remain sensitive to input costs.
PAHC’s Multiple Looks Low Next to Its Benchmarks
PAHC is trading at 9.4x forward 12-month earnings versus 15.8x for the Zacks sub-industry, 20.3x for the Zacks sector, and 21.4x for the S&P 500. Against that backdrop, the stock’s roughly 10x earnings profile sits well below the broader market and sector reference points investors typically use when comparing quality and risk.
Image Source: Zacks Investment Research
The price target is also tied directly to a forward multiple approach. The $33 target reflects 9.9x forward 12-month earnings, slightly above the current forward multiple, implying modest multiple expansion if execution stays on track.
Phibro’s Actionable Checklist for a Short-Term Rating
PAHC carries a Zacks Rank #2 (Buy), supported by a Value Score of A, with Growth at F and Momentum at C. In the broader animal health landscape, large competitors such as Zoetis Inc. ZTS and Merck & Co., Inc. MRK highlight how scale and broad portfolios can shape investor expectations for resilience across cycles. PAHC’s opportunity is to keep delivering clean segment execution so the discount multiple can narrow without relying on a perfect macro backdrop.
You can see the complete list of today's Zacks #1 Rank (Strong Buy) stocks here.
Research Chief Names "Single Best Pick to Double"
From thousands of stocks, 5 Zacks experts each have chosen their favorite to skyrocket +100% or more in months to come. From those 5, Director of Research Sheraz Mian hand-picks one to have the most explosive upside of all.
This company targets millennial and Gen Z audiences, generating nearly $1 billion in revenue last quarter alone. A recent pullback makes now an ideal time to jump aboard. Of course, all our elite picks aren’t winners but this one could far surpass earlier Zacks’ Stocks Set to Double like Nano-X Imaging which shot up +129.6% in little more than 9 months.
Free: See Our Top Stock And 4 Runners Up
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Zoetis Inc. (ZTS) : Free Stock Analysis Report
This article originally published on Zacks Investment Research (zacks.com).
The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.

Is PAHC Undervalued at 10x Earnings vs Peers?

(RTTNews) - Merck Animal Health, a division of Merck & Co. (MRK), on Thursday announced a definitive agreement to acquire TARGAN, a privately held developer of biodevice solutions for the poultry industry, for undisclosed consideration.
The transaction is expected to close in the third quarter of 2026.
The acquisition is expected to expand Merck Animal Health's poultry portfolio with TARGAN's biodevice technologies,
The expansion includes WingScan, an automated chick sex-sorting system that uses vision technology and proprietary algorithms to process up to 160,000 chicks per hour.
The deal also adds high-speed precision ocular spray technology for administering vaccines to day-old chicks and enhances Merck Animal Health's device development capabilities across multiple animal species.
Merck Animal Health has been an investor in TARGAN since 2017 and is one of the company's largest shareholders.
In the pre-market trading, Merck & Co. is 0.56% higher at $119.73 on the New York Stock Exchange.
The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.

Merck Animal Health To Acquire TARGAN To Expand Poultry Technology Portfolio

Wednesday, June 10, 2026
The Zacks Research Daily presents the best research output of our analyst team. Today's Research Daily features new research reports on 16 major stocks, including Merck & Co., Inc. (MRK), The Southern Co. (SO) and Lumentum Holdings Inc. (LITE), as well as a micro-cap stock Peoples Bancorp of North Carolina, Inc. (PEBK). The Zacks microcap research is unique as our research content on these small and under-the-radar companies is the only research of its type in the country.
These research reports have been hand-picked from the roughly 70 reports published by our analyst team today.
You can see all of today’s research reports here >>>
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The daily 'Ahead of Wall Street' article is a must-read for all investors who would like to be ready for that day's trading action. The article comes out before the market opens, attempting to make sense of that morning's economic releases and how they will affect that day's market action. You can read this article for free on our home page and can actually sign up there to get an email notification as this article comes out each morning.
You can read today's AWS here >>> CPI Inflation Rate +4.2%: Hottest in 3 Years
Today's Featured Research Reports
Merck’s shares have outperformed the Zacks Large Cap Pharmaceuticals industry over the past year (+53.3% vs. +25.2%). The company’s blockbuster drug, Keytruda, and new products have been driving sales. Animal Health is also contributing to growth. 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 and oncology portfolios through the acquisitions of Verona Pharma, Cidara Therapeutics and Terns Pharmaceuticals have improved its long-term growth prospects. This progress has increased confidence that Merck can maintain growth even after Keytruda loses exclusivity.
However, it faces several near-term challenges, including persistent challenges for Gardasil in China, potential competition for Keytruda, and rising competitive and generic pressure on some of its drugs.
(You can read the full research report on Merck here >>>)
Shares of Southern Company have gained +7.1% over the past year against the Zacks Utility - Electric Power industry’s gain of +23.2%. The company is a leading U.S. electric utility with a stable, recession-resistant business model, benefiting from strong electricity demand growth, particularly from data centers and hyperscale customers, and a robust pipeline exceeding 75 gigawatts of potential projects.
Southern Company is expanding its regulated generation and transmission assets, investing in battery storage and renewable projects, and maintaining a 25-year streak of dividend increases, appealing to income-focused investors.
However, elevated leverage with $67.1 billion in long-term debt, capital-intensive infrastructure needs, exposure to economic slowdowns, regulatory risks, ongoing depreciation charges, and weather-driven earnings volatility limit financial flexibility. Hence, investors are advised to wait for a better entry point.
(You can read the full research report on Southern Company here >>>)
Lumentum’s shares have outperformed the Zacks Communication - Components industry over the past year (+968.3% vs. +313.6%). The company is benefiting from sustained AI and cloud network buildouts, with record fiscal Q3 revenue and expanding profitability as laser chips and cloud transceivers scale.
Management’s Q4 outlook calls for another step up in revenue and operating margin, supported by continued EML growth, scale-across components like pump and narrow linewidth lasers, and a ramp in 1.6T transceivers with initial internal CW laser integration. A multiyear OCS purchase agreement and the acquisition of an additional indium phosphide fab, backed by a larger cash balance, extend capacity and visibility, while CPO development moves toward revenue.
However, supply constraints and outsourcing dependence can delay shipments, and ongoing ASP and customer concentration risks remain a headwind. Industrial lasers remain muted and can dilute the mix.
(You can read the full research report on Lumentum here >>>)
Shares of Peoples Bancorp of North Carolina have outperformed the Zacks Banks - Southeast industry over the past year (+66.1% vs. +15.4%). This microcap company with a market capitalization of $236.97 million has its investment thesis supported by improving earnings power, driven by balance-sheet management, loan growth and a stable deposit franchise. Margin expansion reflects effective asset-liability management and favorable funding dynamics, while loan growth continues to support revenue generation.
Strong capital levels and a conservative dividend policy provide flexibility to support future growth and shareholder returns. However, key risks include rising operating expenses, potential margin compression from higher funding costs and higher credit costs tied to portfolio growth.
Fee income remains sensitive to appraisal-related activity. Valuation reflects investor caution around the sustainability of earnings growth and credit performance. Further upside will depend on sustaining profitability, maintaining credit quality and delivering consistent earnings growth.
(You can read the full research report on Peoples Bancorp of North Carolina here >>>)
Other noteworthy reports we are featuring today include Sterling Infrastructure, Inc. (STRL), Woodward, Inc. (WWD) and Lamar Advertising Co. (LAMR).
Mark Vickery
Senior Editor
Note: Sheraz Mian heads the Zacks Equity Research department and is a well-regarded expert of aggregate earnings. He is frequently quoted in the print and electronic media and publishes the weekly Earnings Trends and Earnings Preview reports. If you want an email notification each time Sheraz publishes a new article, please click here>>>
Today's Must Read
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Growing Mission-Critical Demand & Integrated Model Aid Sterling (STRL)
Per the Zacks analyst, Sterling is gaining from robust demand trends for mission-critical activity, mainly in data centers and semiconductors. Also, its integrated business model adds to the growth.
Woodward (WWD) Gains from Strength in Aerospace Segment
Per the Zacks analyst, Woodward's Aerospace segment is gaining from strength in the commercial aftermarket and higher defense activity, with fiscal 2026 revenues expected to grow 21-24% from this unit
Lamar (LAMR) Digital Growth Fuels Cash Flow Despite Cyclical Ad Risk
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Service Center Unit Aids Applied Industrial (AIT), Costs Ail
Per the Zacks analyst, Applied Industrial's Service Center Based Distribution segment is driven by increase in demand for technical MRO services. However, high costs remain concerning for the company.
Restructuring Gains and Demand Driven Growth Boosts VMI Prospects
Per the Zacks analyst, VMI is benefiting from ongoing restructuring initiatives that are resulting in cost savings. The Utility segment is also poised for robust growth from high demand.
Investments & Customer Additions Aid Southwest Gas (SWX)
Per the Zacks analyst, Southwest Gas' strategic investment plans will support system improvements and pipe replacement programs. Consistent customer additions will further boost its results.
Blue Owl (OBDC) to Grow on Diversified Portfolio Amid Margin Pressure
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New Upgrades
Five Below's (FIVE) Traffic Gains and Customer Focus Fuel Growth
Per the Zacks analyst, Five Below may benefit from broad-based customer traffic gains and a customer-centric strategy that strengthens engagement and supports sustained demand momentum.
Expanding DevSecOps Footprint Aids GitLab (GTLB) Prospect
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SaaS Expansion Supports Omnicell's (OMCL) Growth Outlook
The Zacks analyst is optimistic about Omnicell's growth outlook, driven by expanding SaaS and Expert Services adoption, pharmacy automation initiatives and global expansion.
New Downgrades
Theravance (TBPH) Relies on Profit Sharing Amid Pipeline Constraints
Theravance's revenue growth is driven by higher profit-sharing income from U.S. Yupelri sales. Lack of Pipeline Diversification and discontinuation of lead its candidate concern the Zacks analyst.
Chord Energy's (CHRD) Williston Basin Advantage Drives Growth
Chord Energy's Williston Basin position and its shift to longer laterals drive cost-efficient production growth. However, its sensitivity to oil prices concerns the Zacks analyst.
Weak Global Vehicle Production to Hurt Aptiv (APTV)
Per the Zacks analyst, weak global vehicle production due to geopolitical tensions, weak momentum for electric cars, and worldwide semiconductor shortage are expected to impact Aptiv's business.
Zacks' Research Chief Names "Stock Most Likely to Double"
Our team of experts has just released the 5 stocks with the greatest probability of gaining +100% or more in the coming months. Of those 5, Director of Research Sheraz Mian highlights the one stock set to climb highest.
This top pick is a little-known satellite-based communications firm. Space is projected to become a trillion dollar industry, and this company's customer base is growing fast. Analysts have forecasted a major revenue breakout in 2025. Of course, all our elite picks aren't winners but this one could far surpass earlier Zacks' Stocks Set to Double like Hims & Hers Health, which shot up +209%.
Free: See Our Top Stock And 4 Runners Up
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Top Research Reports for Merck, Southern Company & Lumentum

Gilead Sciences, Inc. GILD has a market-leading HIV franchise, led by flagship HIV therapies — Biktarvy for treatment and Descovy for prevention.
Last month, the company reported better-than-expected first-quarter results, driven by strong HIV breast cancer drug Trodelvy and liver disease drug Livdelzi sales.
HIV business continues to maintain momentum, driven by solid performance of Biktarvy and Descovy, and incremental contributions from Yeztugo.
Biktarvy continues to be a dominant player in the HIV treatment market, holding more than 52% market share and retaining its position as the most prescribed therapy for both treatment-naïve and switch patients across major markets.
Gilead’s HIV pre-exposure prophylaxis (PrEP) portfolio comprises daily oral Descovy and the first and only twice-yearly injectable Yeztugo.
Descovy’s performance continues to be strong, primarily driven by higher demand and average realized price.
The FDA approval of injectable lenacapavir, a first-in-class capsid inhibitor (under the brand name Yeztugo), solidifies GILD’s HIV portfolio. With a twice-yearly dosing schedule, the therapy offers meaningful adherence advantages over daily oral regimens and targets a broad patient population.
Following better-than-expected first-quarter results and improving market trends, Gilead raised its 2026 sales guidance for Yeztugo to $1 billion, signaling the product’s potential to achieve blockbuster status in its first full year on the market.
Driven by increased Yeztugo sales expectations and strong first-quarter HIV performance, Gilead now projects total 2026 HIV sales growth of approximately 8% year over year, up from its prior guidance of 6% issued in February. The updated outlook includes an estimated 2% headwind related to the U.S. government’s Medicaid drug pricing agreement and proposed Affordable Care Act changes.
The FDA accepted Gilead’s new drug application for bictegravir/lenacapavir (BIC/LEN) for virologically suppressed people living with HIV under priority review, setting a target action date of Aug. 27, 2026. A potential approval of BIC/LEN will further bolster its HIV portfolio.
Looking ahead, with no significant loss-of-exclusivity (LOE) events expected until 2036, Gilead’s HIV franchise is well positioned for sustained long-term growth, supported by the potential launch of up to seven new HIV therapies by 2033.
GILD has also collaborated with Merck MRK to advance its HIV pipeline further.
Gilead and Merck recently announced positive data from two late-stage studies, ISLEND-1 and ISLEND-2, evaluating investigational oral once-weekly single-tablet HIV treatment regimen of islatravir/lenacapavir.
The investigational regimen combines Merck's islatravir, a next-generation nucleoside analog that inhibits HIV replication through multiple mechanisms, including reverse transcriptase translocation inhibition, with Gilead's lenacapavir.
Both studies met the primary efficacy endpoint at week 48. Following the positive phase III results, Gilead and Merck intend to submit the ISLEND trial data to regulatory authorities worldwide and present detailed study findings at an upcoming scientific conference.
Gilead presented encouraging phase I data for the long-acting integrase inhibitor GS-3242 in February. Additional data expected later this year could support the development of a twice-yearly injectable regimen combining GS-3242 with lenacapavir.
Approval of additional treatments should strengthen its dominant HIV franchise.
Competition for GILD’s HIV Business
The HIV treatment landscape is dominated by many bigwigs, such as GSK plc GSK and Merck, apart from GILD.
HIV sales account for a major chunk of GSK’s Specialty Medicines portfolio. GSK continues to grow its HIV business, driven by strong patient demand for long-acting injectable medicines (Cabenuva and Apretude) and Dovato. The solid growth from these drugs has helped GSK combat the decline in Triumeq sales.
MRK markets doravirine for treating adults with HIV-1 in the United States, either as a monotherapy under the brand name Pifeltro or as part of the single-tablet combination regimen under the brand name Delstrigo (doravirine/lamivudine/tenofovir disoproxil fumarate).
MRK recently won FDA approval of Idvynso, a once-daily, two-drug single-tablet regimen containing doravirine (100 mg) and islatravir (0.25 mg), for adults living with HIV-1 who are virologically suppressed on a stable antiretroviral regimen. The approval covers patients with no history of treatment failure and no known resistance-associated mutations to doravirine, allowing them to switch from their current HIV therapy.
Merck is also evaluating a once-daily, oral, two-drug, single-tablet regimen of doravirine/islatravir [DOR/ISL (100 mg/0.25 mg)] in treatment-naïve adults with HIV-1 infection.
GILD’s Price Performance, Valuation and Estimates
Shares of GILD have gained 2.3% year to date against the industry’s decline of 3.1%.
Image Source: Zacks Investment Research
Going by the price/earnings ratio, GILD’s shares currently trade at 33.39X forward earnings, higher than its mean of 11.87X and the large-cap pharma industry’s 17.59X.
Image Source: Zacks Investment Research
The consensus estimate for 2026 has deteriorated sharply over the past 30 days, shifting to a loss of 79 cents per share from projected earnings of $4.32 per share. The estimate for 2027 has also edged lower to $9.53 per share from $9.57 during the same period.
Image Source: Zacks Investment Research
While Gilead’s recent aggressive dealmaking strategy strengthens its long-term pipeline and growth potential, the sizable upfront payments and integration-related costs are pressuring near-term profitability.
GILD currently carries a Zacks Rank #3 (Hold). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
Zacks' Research Chief Names "Stock Most Likely to Double"
Our team of experts has just released the 5 stocks with the greatest probability of gaining +100% or more in the coming months. Of those 5, Director of Research Sheraz Mian highlights the one stock set to climb highest.
This top pick is a little-known satellite-based communications firm. Space is projected to become a trillion dollar industry, and this company's customer base is growing fast. Analysts have forecasted a major revenue breakout in 2025. Of course, all our elite picks aren't winners but this one could far surpass earlier Zacks' Stocks Set to Double like Hims & Hers Health, which shot up +209%.
Free: See Our Top Stock And 4 Runners Up
Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report
The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.

Can Gilead Sciences HIV Franchise Drive Long-Term Growth?

Merck’s MRK stock climbed above its 50-day SMA from early June after trading below it for most of May. However, the stock has consistently been trading above its 200-day SMA since October 2025, which suggests that the stock is in a long-term uptrend. The stock's recent return to above the 50-day SMA mark signals improving intermediate-term momentum.
Image Source: Zacks Investment Research
Ideally, stocks that regain their 50-day SMA while already holding above the 200-day SMA are often viewed as having a favorable risk-reward profile because the long-term trend never broke down.
However, to make a proper investment decision, one should properly assess a company’s strengths and weaknesses. Let’s break down.
Keytruda: Merck’s Biggest Strength
Merck boasts more than six blockbuster drugs in its portfolio, with Keytruda being the key top-line driver. Keytruda, approved for several types of cancer, alone accounts for around 55% of the company’s pharmaceutical sales. Keytruda now holds 44 FDA-approved indications spanning 19 tumor types, along with two tumor-agnostic approvals.
The drug has played an instrumental role in driving Merck’s steady revenue growth over the past few years. Keytruda recorded sales of $8.0 billion in the first quarter of 2026, up 8% year over year.
Keytruda sales are gaining from continued strong momentum in metastatic indications and rapid uptake across earlier-stage launches. The company expects the growth to continue till it loses patent exclusivity in 2028.
Merck is working on different strategies to drive Keytruda's long-term growth. These include innovative immuno-oncology combinations, including Keytruda with LAG3 and CTLA-4 inhibitors. In partnership with Moderna MRNA, Merck is developing a personalized mRNA therapeutic cancer vaccine called intismeran autogene (V940/mRNA-4157) in combination with Keytruda in pivotal phase III studies for earlier-stage and adjuvant NSCLC and adjuvant melanoma.
Merck expects Keytruda to achieve peak sales of $35 billion by 2028. Merck’s other oncology drugs, Welireg, AstraZeneca AZN-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.
MRK’s Pipeline Progress & Recent M&A Spree
Merck’s expanding drug pipeline and potential new blockbuster drugs beyond Keytruda look encouraging.
Its phase III pipeline has almost tripled since 2021, supported by in-house pipeline progress as well as the addition of candidates through M&A deals. Merck expects to launch 20 new drugs by 2030, with many already launched.
Its new products, pulmonary arterial hypertension drug, Winrevair, cancer drug, Welireg and 21-valent pneumococcal conjugate vaccine, Capvaxive, have begun to contribute significantly to top-line growth.
Merck’s RSV antibody, Enflonsia (clesrovimab), was approved in the United States in June 2025 and in the EU in April 2026. A once-daily, single-tablet two-drug regimen of doravirine and islatravir, Idvynso, was approved in the United States for virologically suppressed HIV-1 in April 2026.
The company has other promising candidates in its late-stage pipeline, such as enlicitide decanoate/MK-0616, an oral PCSK9 inhibitor for hypercholesterolemia, tulisokibart, a TL1A inhibitor for ulcerative colitis and Daiichi-Sankyo-partnered antibody-drug conjugates.
Merck has been on an acquisition spree in the past year, as it faces the looming patent expiration of Keytruda in 2028. The acquisition of Verona in 2025 added Ohtuvayre, a novel, first-in-class maintenance treatment for chronic obstructive pulmonary disease, with multibillion-dollar commercial potential. Ohtuvayre's commercial launch is off to a solid start.
In January 2026, Merck acquired Cidara Therapeutics, which added its lead pipeline candidate, MK-1406 (formerly CD388), a first-in-class long-acting, strain-agnostic antiviral agent, currently being evaluated in late-stage studies for the prevention of seasonal influenza in individuals at higher risk of complications.
In April 2026, it acquired California-based cancer biotech, Terns Pharmaceuticals, which added Terns’ lead chronic myeloid leukemia candidate, TERN-701, a novel oral allosteric inhibitor of the BCR::ABL oncogene, to Merck’s hematology/cancer pipeline. Merk believes TERN-701 has multibillion-dollar commercial potential.
Declining Sales of MRK’s Gardasil & Other Vaccines
Sales of Merck’s second-largest product, its HPV vaccine, Gardasil, plunged 22% to $1.07 billion in the first quarter due to continued weak sales performance in China. Sales of Gardasil are declining in China due to weak demand trends amid an economic slowdown. The company is also seeing lower demand for the vaccine in Japan. Gardasil sales are not expected to improve in 2026.
Sales of some other Merck vaccines, like Proquad, M-M-R II, Varivax, Rotateq and Vaxneuvance, also declined in the first quarter.
MRK’s Keytruda Faces Patent Expiration 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.
MRK’s Generic Headwinds in 2026
MRK is seeing declining demand for its diabetes products (Januvia/Janumet) and the generic erosion of some drugs like Isentress/Isentress HD and Bridion in the European Union and Dificid in the United States. Bridion is expected to lose patent exclusivity in the United States in July 2026, and sales are expected to significantly decline thereafter. Sales of Januvia/Janumet are expected to decline steeply from 2026 onward due to government price setting, an anticipated patent expiry in 2026 and ongoing competitive pressure.
In 2026, Merck expects generic competition for Januvia/Janumet, Bridion and Dificid to hurt revenues by approximately $2.5 billion.
MRK Share Price, Valuation & Estimates
Merck’s shares have risen 13.6% so far this year compared with an increase of 3.9% for the industry. The stock has also outperformed the sector as well as the S&P 500 index, as seen in the chart below.
Merck Stock Outperforms Industry, Sector & S&P 500
Image Source: Zacks Investment Research
From a valuation standpoint, Merck looks reasonably priced. Going by the price/earnings ratio, the company’s shares currently trade at 16.54 forward earnings, slightly lower than 17.59 for the industry. However, the stock is trading above its 5-year mean of 12.76.
MRK Stock Valuation
Image Source: Zacks Investment Research
Estimates for MRK’s 2026 earnings have risen from $5.14 to $5.17 per share over the past 60 days, while those for 2027 have declined from $9.87 per share to $9.85 per share.
MRK Estimate Movement
Image Source: Zacks Investment Research
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 expects over $70 billion of potential non-risk-adjusted commercial opportunity for the current pipeline by the mid-2030s. This estimate is more than double the peak consensus sales estimate for Keytruda of $35 billion in 2028. Merck said that the estimate of $70 billion was $20 billion higher than what they expected just one year ago.
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.
However, Merck faces several near-term challenges, including persistent challenges for Gardasil in China, potential competition for Keytruda, and rising competitive and generic pressure on some of its drugs.
Long-term investors may continue retaining this Zacks Rank #3 (Hold) stock and see how the company manages its future product and pipeline growth and replaces Keytruda revenues. You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
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