The core business is performing well with raised sales guidance and strong launch momentum (WINREVAIR, KEYTRUDA QLEX, LIPFENDRA), but the EPS guidance cut from acquisition charges creates headline noise. Traders should focus on operational trends excluding one-time items and watch for pipeline catalysts (KEYTRUDA label expansions, LIPFENDRA launch trajectory, Terns integration). The stock may trade on ex-charge operational momentum rather than GAAP losses.
Price Chart
Executive Summary
Merck reported Q2 2026 revenue of $16.6B (+5% YoY), beating consensus of $16.37B, and non-GAAP EPS of -$0.13 vs consensus -$0.26 (a 50% beat). The company raised its full-year sales guidance to $66.3B-$67.3B but lowered non-GAAP EPS guidance to $2.66-$2.76 due to $2.31/share charge from the Terns acquisition. Operational strength in oncology (KEYTRUDA QLEX uptake, WINREVAIR +75%) and new product launches (LIPFENDRA approval) was offset by acquisition-related losses and declining legacy franchises (GARDASIL, JANUVIA).
Key Financial Metrics
Key Facts
- Q2 2026 sales $16,607M (+5% YoY; +4% ex-FX)
- Non-GAAP EPS -$0.13 vs consensus -$0.26 (beat by 50%)
- KEYTRUDA/KEYTRUDA QLEX combined sales $8,366M (+5% YoY); KEYTRUDA QLEX contributed $463M
- WINREVAIR sales $588M (+75% YoY)
- Full-year 2026 sales guidance raised to $66.3B-$67.3B from $65.8B-$67.0B
- Full-year non-GAAP EPS guidance lowered to $2.66-$2.76 from $5.04-$5.16 due to $2.31/share Terns acquisition charge
- GAAP loss per share -$0.54; non-GAAP loss per share -$0.13
- Completed acquisition of Terns Pharmaceuticals for $6.8B
- FDA approved LIPFENDRA (enlicitide), first oral PCSK9 inhibitor
- Gross margin (GAAP) 73.5% vs 77.5% a year ago; non-GAAP gross margin 81.1% vs 82.2%
Financial Impact
Revenue beat by $237M (1.45%); EPS beat by $0.13 (50%); sales guidance raised by ~$0.4B at midpoint; EPS guidance lowered by ~$2.39 at midpoint due to acquisition charges
Risk Factors
- KEYTRUDA faces patent cliff (LOE expected late 2028); pipeline replacement risk
- GARDASIL sales declining in China (-19% in Q1, +4% in Q2 but volatile)
- Integration of Terns and Cidara acquisitions may dilute near-term EPS further
- Non-GAAP EPS guidance of $2.66-$2.76 implies H2 2026 EPS of ~$4.07-$4.17 (excluding charges) vs H1 loss; execution risk
Market Snapshot
Investment Themes
Documents Analyzed
This report is based on 7 SEC documents filed with EDGAR.
| Document | Accession Number |
|---|---|
| 8-K Filing (Primary) | 0001104659-26-090045 |
| Document: tm2621496d1_ex99-1.htm | 0001104659-26-090045 |
| Document: tm2621496d1_8k.htm | 0001104659-26-090045 |
| Document: 0001104659-26-090045-index-headers.html | 0001104659-26-090045 |
| Document: 0001104659-26-090045-index.html | 0001104659-26-090045 |
| Document: 0001104659-26-090045.txt | 0001104659-26-090045 |
| 8-K Data (Synthetic) | 0001104659-26-090045 |
Filters
| Type | Now | ||||
|---|---|---|---|---|---|
Sep 11, 2026 21d ago | Court Ruling | $143.93 $146.87 | ▲ +2.04% | ▲ +2.26% | $143.81 (−0.08%) |
Sep 9, 2026 23d ago | Court Ruling | $147.53 $144.91 | ▼ −1.78% | ▼ −1.12% | $143.81 (−2.52%) |
Aug 27, 2026 5w ago | Court Ruling | $149.54 $152.34 | ▲ +1.87% | ▲ +1.60% | $143.81 (−3.83%) |
Aug 24, 2026 5w ago | Court Ruling | $150.66 $147.73 | ▲ +1.95% | ▲ +2.42% | $143.81 (+4.55%) |
Aug 20, 2026 6w ago | ANALYST-UPGRADE | $148.99 $149.54 | ▲ +0.37% | ▼ −0.75% | $143.81 (−3.48%) |
Aug 13, 2026 7w ago | Insider Cluster | $135.84 $152.55 | ▲ +12.30% | ▲ +13.67% | $143.81 (+5.87%) |
Aug 13, 2026 7w ago | Court Ruling | $135.55 $148.99 | ▲ +9.92% | ▲ +11.88% | $143.81 (+6.09%) |
Aug 13, 2026 7w ago | Insider Cluster | $135.55 $148.99 | ▲ +9.92% | ▲ +11.88% | $143.81 (+6.09%) |
Aug 12, 2026 7w ago | ANALYST-UPGRADE | $132.92 $152.20 | ▲ +14.51% | ▲ +14.95% | $143.81 (+8.19%) |
Aug 12, 2026 7w ago | Insider Cluster | $132.92 $152.20 | ▲ +14.51% | ▲ +14.95% | $143.81 (+8.19%) |
US Market Status
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