Key Stats for MRK Stock
- Past-Week Performance: -0.43%
- 52-Week Range: $73 to $123
- Current Price: $122
What Happened to Merck Stock?
Merck (MRK) shares gained 10% since the start of February, holding near current levels despite a packed week of pipeline catalysts, as investors focused instead on the company’s below-consensus 2026 guidance.
Merck’s Q4 2025 earnings told a split story, with worldwide sales of $16.40B beating estimates of $16.19B and adjusted EPS of $2.04 topping the $2.01 forecast, but 2026 revenue guidance of $65.5B to $67.0B landed below Wall Street’s $67.60B expectation.
The guidance miss was sharpened by a one-time $3.65 per share charge tied to the Cidara acquisition, pulling 2026 adjusted EPS guidance to $5.00 to $5.15 against analyst expectations of $5.36.
Underneath the headline numbers, however, Merck’s pipeline continued firing on multiple fronts, with FDA approval of a new KEYTRUDA regimen for platinum-resistant ovarian cancer, a subcutaneous KEYTRUDA approval in Canada, and positive Phase 3 RSV data for ENFLONSIA all dropping within days of each other.
The market is beginning to see Merck less as a KEYTRUDA-dependent company and more as a diversified biopharma platform, with its new Mayo Clinic AI collaboration, RSV franchise, and cancer vaccine partnership with Moderna all signaling long-term pipeline depth.
Multiple senior executives including the CMO, EVP General Counsel, and Chief Digital Officer disposed of shares between February 6 and February 13, adding a layer of caution that likely weighed on sentiment despite the strong pipeline news.
Where is the Merck Stock Headed?
With a good performance this February, Merck’s rapid-fire pipeline catalysts suggest the stock’s near-term story is less about the guidance miss and more about whether KEYTRUDA’s expanding indications can offset the revenue shortfall in 2026 and beyond.
The fundamental concern is real, with 2026 EPS forecast to drop 42.7% to $5.14 and net income margins compressing sharply from 34.6% in 2025 to 19.2% in 2026, largely driven by the one-time $3.65 per share Cidara acquisition charge.
Wall Street remains broadly constructive despite the noise, with a mean price target of $124.88 across 26 analysts, representing 2.6% upside from the current price of $121.66, backed by 15 Buys, 2 Outperforms, and 11 Holds.
The target spread signals genuine disagreement about Merck’s post-KEYTRUDA transition, with the Street’s high at $150 and the low at $100, a $50 gap that reflects real uncertainty around pipeline execution and the Cidara integration.
TIKR’s valuation model is notably more optimistic than the Street, projecting a mid-case target of $179.91 by December 2030, representing a 47.9% total return from current levels at an annualized IRR of 8.4% per year.
That optimism is grounded in the model’s assumption that net income margins recover to 33.2% by 2031, reversing the 2026 compression entirely, with even the low-case scenario projecting a stock price of $150.38 and over 23% total upside from today.
The most pressing risk is not the Cidara charge itself but the structural question of what drives Merck’s growth after KEYTRUDA’s patent cliff approaches, with EBIT margins already forecast to fall from 41.2% in 2025 to 27.2% in 2026.
At $121.66, Merck looks genuinely undervalued relative to its $179.91 model target, making it a compelling long-term buy for patient investors willing to look past the 2026 earnings noise toward the pipeline’s longer-term payoff.
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