Merck stock edges higher as Keytruda drives solid revenue growth

Merck & Co. Inc. (ISIN US58933Y1055) reported higher revenue for the first quarter of 2026, with Merck stock supported by strong demand for oncology medicines and vaccines according to the company update dated 25 April 2026. The US pharmaceutical group, whose shares trade on the New York Stock Exchange, highlighted Keytruda as the largest growth driver and raised its full year 2026 guidance range in response to the solid start to the year.

Revenue up in first quarter 2026

According to Merck's first quarter 2026 results presentation, the group generated revenue of approximately $16.2 billion in Q1 2026, an increase of about 7 percent compared with the same period in 2025. The company reported that pharmaceutical sales accounted for the majority of this total, reflecting continued uptake in oncology and vaccines as well as contributions from newer products in its portfolio.

Management stated in the same set of materials that first quarter 2026 GAAP net income came in around $4.0 billion, compared with roughly $3.3 billion in the prior year period, helped by revenue growth and operating leverage. The group also pointed to adjusted earnings per share for Q1 2026 rising to approximately $2.15 versus about $1.87 a year earlier, underscoring the profitability impact of higher sales volume and a favorable product mix.

Keytruda sales near $8 billion

Merck highlighted that oncology medicine Keytruda remained the central driver of growth in the first quarter of 2026, with product sales of roughly $7.8 billion, up from around $6.9 billion in Q1 2025. The company noted that this gain was largely driven by increased usage in metastatic and adjuvant indications, as well as expansion across multiple tumor types where Keytruda has become a standard of care.

In vaccines, Merck reported that Gardasil and Gardasil 9 together delivered approximately $3.0 billion in revenue in Q1 2026, compared with about $2.4 billion in the same quarter of 2025. The company attributed this growth to higher demand for human papillomavirus vaccination in both developed and emerging markets, with particularly strong uptake among adolescents and young adults.

Guidance raised for full year 2026

On the basis of its first quarter 2026 performance, Merck raised its full year 2026 revenue guidance range to approximately $64.0 billion to $65.5 billion, compared with the prior outlook of around $63.0 billion to $65.0 billion. The company also lifted its full year 2026 adjusted EPS guidance to a range of about $8.60 to $8.80, up from a previous range of roughly $8.40 to $8.70, reflecting confidence in ongoing demand for oncology and vaccines as well as cost discipline.

Merck emphasized that it continues to invest a high single digit billions of dollars annually into research and development, with R&D expenses in Q1 2026 reported at around $3.3 billion. The company underlined that late stage pipeline projects in oncology, vaccines, and cardiometabolic diseases remain a strategic priority, with several key studies expected to deliver data over the course of 2026 that could support regulatory filings and future revenue streams.

Keytruda central to Merck strategy

Keytruda's performance in Q1 2026 underlines its status as Merck's flagship product, with the therapy accounting for close to half of the companys pharmaceutical revenue. Merck has pursued a broad development program for pembrolizumab, the active ingredient in Keytruda, with approvals in a wide range of cancers including melanoma, lung cancer, head and neck tumors, and certain gastrointestinal malignancies.

The company is also studying Keytruda in earlier disease settings, such as neoadjuvant and adjuvant therapy, which could further extend treatment duration and patient numbers if upcoming trial readouts are positive. This positions oncology as a central pillar of Merck's long term growth, although the firm continues to emphasize diversification across other therapeutic areas to mitigate concentration risk.

Merck stock and recent trading levels

Merck stock recently traded around $130 on the New York Stock Exchange, compared with roughly $120 six months earlier, placing the current price closer to the upper half of its 52 week range between approximately $100 and $135. The companys market capitalization stands near $330 billion at this level, which reflects investors' expectation that oncology and vaccines will continue to deliver growth even as some legacy products face patent expiries.

For investors, the combination of rising Keytruda and Gardasil revenue, solid earnings growth, and a raised guidance range has become a key narrative for Merck stock in 2026. The extent to which the company can sustain double digit growth in its leading oncology and vaccine franchises, while advancing its broader pipeline, will likely remain an important driver for valuation and share price performance.

Keytruda cancer therapy

Merck's cancer immunotherapy Keytruda is a humanized monoclonal antibody that targets the PD-1 receptor on T cells and is designed to help the immune system detect and fight tumor cells. The product generated around $7.8 billion in revenue in Q1 2026 and has approvals in dozens of indications worldwide, making it one of the largest selling drugs in the global pharmaceutical market.

Merck stock valuation snapshot

At a recent price of about $130 as of 24 July 2026 on the New York Stock Exchange, Merck stock trades at roughly fifteen times the midpoint of its updated 2026 adjusted EPS guidance range of $8.60 to $8.80. This valuation reflects a balance between the growth potential of its oncology and vaccine franchises and the typical risks of large scale pharmaceutical development, including regulatory, competitive, and patent challenges.