Merck & Co., Inc.: 2Q26 Preview: Expecting an In-Line Qtr; Focus Remains on Pipeline/sac-TMT Updates

研报英文原文证据摘录

Merck & Co., Inc.: 2Q26 Preview: Expecting an In-Line Qtr; Focus Remains on Pipeline/sac-TMT Updates

Chris Schott, CFA AC North America Equity Research

(1-212) 622-5676 13 July 2026 J P M O R G A N

christopher.t.schott@jpmorgan.com

Price Performance Summary Investment Thesis and Valuation

Investment Thesis

We continue to see a favorable risk/return for shares from here

as MRK continues to build out its late-stage pipeline / new

product portfolio and with valuation still seeming undemanding.

We are watching a number of pipeline catalysts over the next

6-18 months (including ph3 Tl1A data in IBD, data from MK-

1406 in flu, initial TROP-2 data in various cancer settings along

with several smaller pipeline updates in HIV and

ophthalmology). And we believe these, along with additional

biz dev, position MRK for further re-rating from here. Maintain

YTD 1m 3m 12m OW rating.

Abs 17.4% 3.7% 1.8% 47.0%

Rel 6.7% -0.5% -9.4% 26.4% Valuation

Our Dec 2026 price target of $140/share is based on a DCFCompany Data

methodology, as we believe this best captures the overall value

Shares O/S (mn) 2,540

52-week range ($) 130.29-76.66 of these businesses. For our Merck DCF, we take the present

Market cap ($ mn) 313,791.60 value of cash flows within our forecast window and thereafter

Exchange rate 1.00 wind down the existing-products business, while including risk-

Free float (%) 99.9%

3M ADV (mn) 10.40 adjusted contributions from pipeline assets. We use a 0% sector

3M ADV ($ mn) 1,227.2 terminal growth rate and a WACC of 8.5%, consistent with our

Volatility (90 Day) 29 assumptions on the broader pharma sector.

Index S&P 500

BBG ANR (Buy | Hold | Sell) 24|9|0

Key Metrics (FYE Dec) Performance Drivers

$ in millions FY25A FY26E FY27E FY28E

Financial Estimates

Revenue 65,011 66,407 70,500 76,613