MRK · Merck

The thesis

Merck's newer drugs and the under-the-skin form of Keytruda are carrying its growth, as the third-quarter results and raised 2026 guidance of 29 October 2026 showed. The first 2027 guidance, expected with the fourth-quarter report in early February 2027, will show whether management's "moderate" growth outlook can absorb more than $2 billion of generic losses before Keytruda's US patent expires in 2028.

The rating is Medium. The business numbers point up, but the deciding figure, 2027 sales guidance, will not be published until February. The quarterly report filed with the SEC on 4 November 2026 shows third-quarter revenue of $18.09 billion, against $17.28 billion a year earlier. Management raised its full-year earnings guidance the same quarter.

The price already reflects the raised 2026 outlook. The shares closed at $147.18 on 11 November 2026. That is 6.2% below the 52-week intraday high of $156.92 from 25 August 2026 and well above the 52-week closing low of $90.95 from 11 November 2025. The 2027 outlook is the part the market has not yet been able to price.

The pipeline news since the report has come from outside the 2027 numbers. On 9 November 2026 Merck said efinopegdutide met its main goal in a Phase 2b trial in metabolic dysfunction-associated steatohepatitis (MASH), a fatty-liver disease that scars the liver. The HIV Glasgow meeting ended on 11 November 2026. There Merck presented subgroup analyses of its once-weekly islatravir/lenacapavir pill, which it plans to file with regulators.

Bullish and bearish views on Merck & Co., Inc.

The bull case on Merck & Co., Inc. (MRK), in brief: Keytruda is still growing. The bear case: third-quarter sales included timing gains.

Bull case

• Keytruda is still growing. Keytruda and Keytruda Qlex sales rose 6% to $8.6 billion in the third quarter, per Merck's 29 October 2026 release. Qlex, the under-the-skin form, contributed $830 million.
• Qlex conversion has a stated goal. On the 29 October 2026 earnings call, oncology president Johannes Oosthuizen said Merck feels good about reaching 30% to 40% of US Keytruda use on Qlex by the end of 2027. A high share before the 2028 patent expiry is what makes the switch valuable.
• Winrevair and Welireg are scaling. Winrevair, which treats high blood pressure in the lungs, rose 93% to $694 million in the third quarter. Welireg rose 56% to $307 million, and Gardasil rose 14% to $1.995 billion, per the 29 October 2026 release.
• 2026 guidance went up. Merck narrowed its 2026 sales guidance to $66.8–67.3 billion from $66.3–67.3 billion. It raised non-GAAP earnings per share (EPS) guidance to $2.77–2.82 from $2.66–2.76, per the 29 October 2026 release.
• The liver-disease drug cleared Phase 2b. At 52 weeks, 56%, 63% and 61% of patients on the 4 mg, 7 mg and 10 mg doses of efinopegdutide had their MASH resolve without worse liver scarring. The rate on placebo was 13%, per Merck's 9 November 2026 release, with the results published in The Lancet the same day.
• Two FDA decisions are dated. The US Food and Drug Administration (FDA) set a 15 June 2027 decision date for sacituzumab tirumotecan (sac-TMT) in previously treated endometrial cancer, per the 29 October 2026 release. Merck said on 2 November 2026 that the FDA set a 22 April 2027 action date for Idvynso (doravirine/islatravir) applications, including adults starting HIV treatment.
• An analyst raised his target after the report. Daiwa Securities raised its price target to $160 from $143 on 4 November 2026, per Fiscal.ai.

Bear case

• Third-quarter sales included timing gains. On the 29 October 2026 call, Chief Financial Officer Caroline Litchfield said $550 million of third-quarter sales came from when customers placed orders. Of that, $200 million of Keytruda and $50 million of Winrevair reverse in the fourth quarter, and $250 million of vaccines reverse in 2027.
• Generic losses arrive in 2027. Management said on the 29 October 2026 call that more than $2 billion of generic losses across Bridion, the Januvia family and Adempas will partly offset 2027 growth. It expects operating expenses to rise by a mid- to high-single-digit percentage.
• Third-quarter EPS fell. Non-GAAP EPS was $2.49, down 3% from $2.58 a year earlier, including a $0.12 per share licensing charge, per the 29 October 2026 release.
• Capvaxive growth has slowed. Sales of the adult pneumococcal vaccine grew 8% to $263 million in the third quarter, per the 29 October 2026 release. That is far below the pace of Merck's other newer products.
• Qlex faces patent lawsuits. Halozyme is suing over the under-the-skin Keytruda in Europe, including in a court in The Hague, and in US federal court in New Jersey. A loss would slow the switch Merck is counting on before 2028.
• Some forecasters see the price as full. 24/7 Wall St. set a 12-month target of $124.70 with a Hold rating on 3 November 2026, after the third-quarter beat.

Price setup

The shares closed at $147.18 on 11 November 2026, per daily closes. The 50-day moving average is $146.18 and the 200-day moving average is $127.14, both as of that close. The shares are up 9.2% over three months.

Since the 4 November 2026 close of $150.36, the shares have traded in a narrow range. They closed at $146.73 on 6 November 2026 and $148.76 on 9 November 2026. They sit just above the 50-day average and 6.2% below the 52-week high of $156.92 from 25 August 2026.

The 50-day average is the nearest level the case turns on. A sustained move below it would show the post-report gain fading before the February guidance. A close back above the August high would show the market pricing 2027 growth before management states it.

Catalysts ahead

• ~1 February 2027 (est.): CMS list of drugs selected for the next Medicare price-negotiation cycle. Shows whether Keytruda is selected and whether the under-the-skin Qlex form is treated with it, which sets how much US pricing pressure follows the 2028 patent expiry.
• ~3 February 2027 (est.): Fourth-quarter 2026 report and first 2027 guidance. Puts a number on the moderate 2027 growth management described against more than $2 billion of generic losses, and shows Keytruda and Winrevair sales after the flagged purchase-timing reversal.
• 22 April 2027: FDA action date for Idvynso supplemental applications, including treatment-naive adults. A wider label would open the larger first-treatment HIV market to Merck's two-drug regimen.
• 15 June 2027: FDA decision date for sac-TMT in previously treated endometrial cancer. First US approval for the antibody-drug conjugate Merck needs as an oncology growth driver after Keytruda.

What would change the view

A daily close below $138, which would erase the gain since the 29 October 2026 third-quarter report; or 2027 guidance at the fourth-quarter report implying flat or falling sales.

The risks this note tracks, each with what would confirm it:

• Keytruda growth stalls before newer products are large enough to replace it ahead of its 2028 US patent expiry. Confirmed by: Keytruda/Keytruda Qlex sales falling year over year at the fourth-quarter 2026 report by more than the $200 million purchase-timing reversal management flagged.
• 2027 guidance shows generic losses and rising operating costs outweighing growth from newer products. Confirmed by: a 2027 sales range at the early-February report that implies flat or lower sales than 2026.
• Capvaxive's US slowdown deepens on lower adult pneumococcal vaccination rates and net pricing. Confirmed by: capvaxive sales falling year over year in the fourth-quarter 2026 report.
• Halozyme's patent cases limit the shift of patients to Keytruda Qlex before the core patents expire. Confirmed by: a US court ruling against Merck in Halozyme's New Jersey case, or injunctions extending beyond the six European markets Merck named on 29 October 2026.
• Efinopegdutide's tolerability or comparison with semaglutide falls short of what a Phase 3 program needs. Confirmed by: Merck declining to start Phase 3, or full semaglutide-arm data showing similar efficacy with better tolerability than efinopegdutide.
• PD-1/VEGF drugs such as ivonescimab take share from Keytruda in lung cancer. Confirmed by: Phase 3 head-to-head results showing a PD-1/VEGF drug beating Keytruda-based treatment, or US filings built on such results.

What it trades with

Merck trades with large US drugmakers and with defensive health-care stocks. Those can lag when investors favour growth or cyclical sectors, as Benzinga reported on 6 November 2026 and 11 November 2026 when defensives trailed. US drug-pricing policy moves the whole group: Benzinga reported on 11 November 2026 that pricing pressure from Washington was rising for Lilly and Gilead.

News about Merck's partners moves Merck too. Intismeran autogene is shared with Moderna. Merck licensed sac-TMT from Kelun-Biotech and efinopegdutide from Hanmi Pharmaceutical. Halozyme is on the other side of the Qlex patent cases.

The name is often confused. Headlines on 10 November 2026 about the FDA approval of pimicotinib (Pimjetmi) for tenosynovial giant cell tumor concern Germany's Merck KGaA, not Merck & Co. A 9 November 2026 news-feed item about a complete response letter (an FDA rejection) for Keytruda plus Lenvima in first-line liver cancer repeats a July 2020 decision, per Merck's press release of 8 July 2020.