Abstract
Merck will report fourth-quarter results on February 03, 2026, Pre-Market. Expectations center on modest top-line growth and steady margin support, with consensus pointing to year-over-year EPS expansion driven by core oncology and vaccines.
Market Forecast
For the current quarter, market tracking shows Merck’s revenue estimate at USD 16.19 billion, with forecast year-over-year growth of 4.53%. Forecast EBIT is USD 6.05 billion with a 22.44% year-over-year increase, and forecast adjusted EPS is USD 2.02, up 24.75% year-over-year. Detail on gross profit margin and net profit margin guidance is not explicitly available in company forecast feeds, but consensus implies stable high-70s gross margin and a net profit mix supported by oncology product cadence and operating leverage. The main business is expected to maintain growth momentum, supported by oncology and vaccines demand, with steady trends in Animal Health. The most promising segment is prescription pharmaceuticals, which is modeled at USD 15.61 billion in quarterly revenue, and forecast YoY growth centers on mid-single digits, reflecting broad-based portfolio strength.
Last Quarter Review
Merck’s previous quarter delivered revenue of USD 17.28 billion, a gross profit margin of 78.32%, GAAP net profit attributable to the parent company of USD 5.79 billion, a net profit margin of 33.49%, and adjusted EPS of USD 2.68, rising 70.70% year-over-year. A notable highlight was earnings outperformance versus consensus, with EBIT of USD 7.86 billion and adjusted EPS of USD 2.68 each surpassing market estimates, supported by operating efficiency and product mix resilience. Main business highlights included Pharmaceuticals revenue of USD 15.61 billion, Animal Health revenue of USD 1.62 billion, and Other revenue of USD 0.05 billion, with pharmaceuticals driving the quarter’s growth and share of total revenue.
Current Quarter Outlook
Main Business: Prescription Pharmaceuticals
Prescription pharmaceuticals anchor Merck’s quarterly profile, with oncology and vaccines continuing to be the core revenue and earnings engines. The forecast points to quarterly revenue of USD 15.61 billion for the segment, supported by consistent demand and favorable geographic and product mix. Margin support is expected to be resilient, reflecting high gross profitability at 78.32% last quarter and operating leverage evident in the EBIT and EPS beats. Sequential drivers include stable pricing, limited seasonality in key assets, and portfolio breadth that cushions volatility. Near-term growth visibility is underpinned by core therapy areas that maintain share and volume. The principal watchpoint remains maintaining high-teens adjusted EPS growth against a tougher comparison base, which the forecast suggests is achievable given the mix of oncology and vaccines.
Most Promising Business: Oncology within Pharmaceuticals
Within prescription pharmaceuticals, oncology holds the strongest incremental growth potential, reflected in consensus expectations for EPS expansion of 24.75% year-over-year. The forecasted margin structure, implied by a high-70s gross margin and firm EBIT trajectory at USD 6.05 billion, suggests continuing operating leverage from oncology scale effects. The demand profile for leading oncology therapies is anticipated to remain stable, with ongoing label breadth and geographic uptake supporting mid-single-digit revenue growth at the consolidated level. Portfolio depth helps mitigate asset-specific volatility and supports sustained margin mix. The quarter’s success in oncology should translate into durable EPS gains if prescription trends and international contributions hold in line with recent quarters.
Stock Price Drivers This Quarter
Stock performance this quarter will likely hinge on the balance of revenue growth against margin consistency, with consensus looking for USD 16.19 billion in sales and EBIT of USD 6.05 billion. Upside scenarios include stronger-than-modeled oncology and vaccines volumes, incremental pricing, and continued cost discipline that extends EBIT and EPS beats beyond consensus. Downside risks revolve around product-level variability and any unexpected cost or R&D timing shifts that compress margins. The magnitude of EPS growth at 24.75% year-over-year is a focal point for investors, as it encapsulates operating leverage, mix, and execution. Delivering on both top-line stability and EPS expansion would support a constructive stock reaction, with Animal Health trends serving as a secondary stabilizer. The market will also parse operating commentary for signals on sustainability of margin trends and the cadence of growth across core therapy areas.
Analyst Opinions
Analyst and institutional commentary over the last six months shows a majority leaning positive, with Buy and Neutral ratings split toward Buy at the margin and price targets implying constructive upside. Wells Fargo reaffirmed a Buy rating and set a USD 125.00 price target, citing pipeline breadth and execution that support favorable earnings trajectories. Bank of America maintained a Buy view and lifted its price target to USD 120.00, highlighting that Merck’s pipeline has “rounded out,” with six to seven drugs viewed as reasonably de-risked and possessing large peak sales potential. Neutral ratings from TD Cowen, Bernstein, Citi, BMO Capital, and Morgan Stanley emphasize balanced near-term earnings against longer-term loss-of-exclusivity considerations, but do not undercut the quarter’s growth expectations reflected in EPS and EBIT forecasts. In aggregate, the ratio of bullish to bearish views skews toward bullish, with supportive Buy calls outweighing Hold stances and a lack of explicit negative ratings in the recent window. The majority perspective expects Merck to meet or modestly beat consensus on EPS and maintain revenue growth, supported by oncology and vaccines momentum, pipeline optionality, and disciplined cost management.Disclaimer: Investing carries risk. This is not financial advice. The above content should not be regarded as an offer, recommendation, or solicitation on acquiring or disposing of any financial products, any associated discussions, comments, or posts by author or other users should not be considered as such either. It is solely for general information purpose only, which does not consider your own investment objectives, financial situations or needs. TTM assumes no responsibility or warranty for the accuracy and completeness of the information, investors should do their own research and may seek professional advice before investing.
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