Over the past three months, Merck shares have surged by more than 32%, driven in part by broad market strength and rotation into large‐cap pharmaceutical names. Despite this impressive run, consensus earnings estimates for 2026 have been lowered by 4% since December, as eleven of fifteen brokerages maintain sell or underweight ratings. Analysts point to slowing growth in Merck’s core oncology division and growing skepticism around margin expansion as key drivers of the diminished outlook.

Keytruda currently accounts for over half of Merck’s pharmaceutical revenue, generating more than $25 billion in sales during the first nine months of 2025. Patent exclusivity for most indications begins expiring in 2028, with biosimilar entry expected in key European markets shortly thereafter. Industry forecasts project a 40% contraction in Keytruda revenue by 2030 unless Merck secures label expansions or successful combination strategies. Investors are watching Merck’s late‐stage pipeline for lifelines to Keytruda’s top‐line contribution.

Merck’s human papillomavirus vaccine, Gardasil, saw a 12% year‐over‐year decline in sales during Q3 2025, falling to $3.8 billion as vaccination rates in the U.S. plateaued and competitive offerings from recombinant platforms gained traction. Management has cut full‐year Gardasil revenue projections by $400 million following softer uptake in adolescent immunization programs across Europe. Vaccine divisions now represent under 20% of total company revenue, down from 25% two years ago.

In mid‐January, Merck executives forecast that new biologic and small‐molecule candidates in cardiometabolic, respiratory and infectious disease could drive $70 billion in annual sales by the mid-2030s. Key assets include an inhaled interleukin-5 inhibitor in Phase III for severe asthma and a novel oral antiviral for respiratory syncytial virus, both of which report pivotal trial readouts in 2027. Investors will assess upcoming data releases and regulatory filings to gauge whether these late-stage programs can offset revenue falls from Keytruda and Gardasil over the next decade.