This MRK Stock Forecast article was written by Milana Ledova – Financial Analyst at I Know First.

Highlights

• Merck is doubling down on its core strengths: oncology, vaccines, and animal health.
• Key pipeline assets and blockbuster Keytruda will fuel near-term and long-term earnings.
• Valuation remains compelling versus other Big Pharma names, particularly given Merck’s innovation pipeline.

Overview

Merck & Co., Inc. (NYSE: MRK), one of the world’s leading pharmaceutical companies, is undergoing a strategic evolution centered on scientific leadership and pipeline execution. The company’s future isn’t just about riding the success of Keytruda, its $25B+ immuno-oncology juggernaut, but ensuring what comes next in a post-Keytruda world. CEO Robert Davis is orchestrating a delicate but deliberate transition : aggressively investing in oncology, vaccines, and cardiovascular innovation, while leveraging cash flows to acquire promising biotech assets. This is Merck’s science-forward sequel, with its eyes firmly set on sustaining double-digit growth past the Keytruda patent cliff.

Revenue Breakdown & Growth Drivers

Merck & Co’s revenue reached at $64.2 billion in FY2024 with 5-year CAGR of 11.5%. The sales increase was primarily due to growth in oncology, cardiovascular and animal health, partially offset by declines in diabetes, virology (driven largely by lower salesof COVID-19 medication Lagevrio), immunology (as Merck’s marketing rights to these products ended in 2024) and vaccines. Merck’s performance during 2024 was driven by continued demand across its innovative portfolio, including for recently launched products, enabled by theoperational and commercial execution of its science-led strategy.

Pharmaceutical takes the major part in the revenue with a share of 89.5% in 2024 while Animal Health and Other Revenues take 9.2% and 1.4% respectively.

Merck’s growth is driven by several key factors:

• Expansion of Keytruda: Approved for use in over 30 medical conditions, maintaining strong global sales momentum.
• Leadership in vaccinations: Gardasil (an HPV vaccine) continues to be a high-growth product with annual growth exceeding 15%.
• Cardiology pipeline: Positive clinical trial outcomes for sotatercept and partnership with Moderna on personalized cancer vaccines.
• Animal health segment: Stable profit margins and global market expansion, particularly in emerging economies.

Future growth strategies rely on several critical initiatives:

• With Keytruda patents set to expire between 2028 and 2030, Merck is expanding its oncology pipeline with drugs such as: Lenvima (developed in collaboration with Eisai); V940 (cancer vaccine based on mRNA technology developed jointly with Moderna); Sotatercept (acquired via the purchase of Acceleron’s assets, aimed at cardiovascular treatment).
• To mitigate risks associated with patent expiration, Merck has made significant deals, including Prometheus Biosciences for $10.8 billion, the transaction closed in June 2023 focused on therapies for immune disorders and Harpoon Therapeutics, that is an early-stage oncology pipeline deal concluded in 2024.
• Collaborations with companies like Absci and NVIDIA demonstrate efforts to incorporate AI and machine learning technologies into drug discovery processes, enhancing long-term R&D efficiency.

Merck’s managment guides for:

• EPS target for 2025 is $8.60–$8.90;
• R&D investment exceeds $14 billion annually;
• Dividend yield is about 2.6%, with steady annual increases;
• Free cash flow will exceed $18 billion in 2025, enabling share repurchases and strategic mergers and acquisitions.

How Merck Stacks Up Against Peers

We compared MRK to its peers in the healthcare services sector (including AstraZeneca PLC, Novartis AG, Pfizer Inc., Roche Holding AG., Sanofi). Key relative valuation metrics include:

Based on the information above, MRK’s target price is $107.09. Currently, MRK stock trades at $79.16 on 30 June, 2025, that generates upside of 18%.

MRK Stock Forecast: What Analysts Are Saying

Based on Yahoo Finance, there were 25 analysts presenting recommendation trends in July 2025, among which 4 recommended Strong Buy, 11 Buy, and 10 Hold. The average price target from 25 analysts is around $101.79 within the lowest $82 and the highest $138 price range, compared to the current market price of $79.16.

MRK Stock Forecast: Conclusion

With a fortress balance sheet, deep pipeline, and strategic clarity, Merck stands out as a rare Big Pharma stock offering both yield and growth. For investors betting on durable innovation and clinical execution, MRK is worth a long look.

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