Valued at $209.8 billion by market cap, Merck & Co., Inc. (MRK) is a global pharmaceutical powerhouse headquartered in Rahway, New Jersey. With a legacy spanning over 130 years, Merck is known for its deep focus on innovative medicines, vaccines, and animal health products. The company’s portfolio includes blockbuster drugs like Keytruda, its top-selling immunotherapy for various cancers, and Gardasil, a vaccine for HPV.

Shares of Merck have significantly lagged behind the broader market over the past year. While the broader S&P 500 Index ($SPX) has climbed 10.2%, MRK has tumbled 35% during the same period. The trend has continued into 2025, with MRK down 16.7% year-to-date, compared to a 3.9% dip in the S&P 500. 

The stock’s struggles are even more evident when compared to the iShares U.S. Pharmaceuticals ETF (IHE), which is up 3.3% over the past year and has posted a modest 1.1% gain so far in 2025.

On Apr. 24, Merck shares climbed 1.4% and the company delivered Q1 2025 results, with revenue declining 2% year-over-year to $15.5 billion due to currency impacts, although core sales rose 1%. The company beat earnings expectations with a non-GAAP EPS of $2.22. Notably, the newly launched Winrevair exceeded expectations with $280 million in sales. While animal health revenue grew 5%, Merck slightly trimmed its full-year EPS guidance due to $200 million in additional tariff-related costs. 

For fiscal 2025, ending in December 2025, analysts expected MRK’s EPS to grow 16.7% to $8.93 on a diluted basis. The company’s earnings surprise history is impressive. It beat the consensus estimate in each of the last four quarters.

Among the 24 analysts covering MRK stock, the consensus is a “Moderate Buy,” a step down from “Strong Buy” three months ago.  The current consensus is based on 15 “Strong Buys” and nine “Hold” ratings.

This configuration is less bullish than three months ago, with 18 analysts suggesting a “Strong Buy.”

On Apr. 22, Cantor Fitzgerald initiated coverage on Merck with a “Neutral” rating and an $85 price target, citing the stock's grim drop over the past year, far steeper than the biotech sector’s 14% decline. Concerns over long-term growth, especially after Keytruda’s exclusivity ends in 2028, have weighed on the stock. While Merck is working to offset this loss with new drug launches, like a subcutaneous version of Keytruda and treatments in areas such as HIV and RSV, analysts still expect a revenue dip post-2028. 

The mean price target of $106.41 represents a 28.5% premium to MRK’s current price levels. The Street-high price target of $138 suggests an ambitious upside potential of 66.6%.