MRK US S&P 500DJIARussell 1000 Earnings call · transcribed from the recording
Merck & Co. (MRK) · Q3 2026 results and valuation
Share price: $147.18 · 2026-11-11
Results Q3 2026 vs Q2 2026 · previous quarter · published 29 Oct 2026 and 4 Aug 2026
Net income turned to a profit from a loss last quarter. Management sounded about as positive as a typical company call, in its script and in answers to analysts.
Only a basic analysis is available for this company at the moment.
1 · Numbers
Turned profit
Net income vs Q2 2026
Outlook given
Net income 5.07B vs -1.33B
Revenue +8.9%
2 · How management spoke
Typical
More upbeat than 54% of company calls
Answers to analysts: restrained, in line with the script.
Similar to last call.
3 · What stood out
Guidance
Merck & now expects revenue to be between $66.8 and $67.3 billion, representing growth of 3% to 4%.
Valuation
Is Merck & Co. undervalued?
Reverse DCF. Free cash flow from the last full fiscal year (2025-12-31), grown for 10 years, discounted back, plus a terminal value. “Implied growth” is the rate the current price assumes.
At 3.1% growth a year (3-year revenue growth), the model's fair value is $51.91 a share — the stock trades 184% above it. Today's price assumes 14.6% growth a year.
Current price
$147.18
close of 2026-11-11
Market implies growth of iThe yearly free-cash-flow growth, for the next 10 years, that today’s share price already assumes. If you believe the company grows faster than this, the stock is cheap under this model; slower, and it is expensive.
+14.6% for 10 yrs
Fair value / share
$51.91
Buy below
$38.94
Price vs fair value
Overvalued 184%
Price vs buy-below price
Overvalued >200%
Management expects
Revenue +1% · from the Q3 2026 report: “We now expect revenue to be between $66.8 and $67.3 billion, representing growth of 3% to 4%, including a positive impact from foreign exchange of…”
A guidance figure for revenue, usually one year ahead, not a 10-year free-cash-flow rate.
Read between the lines
-
Guidance
Merck & now expects a full year tax rate between 32 and 33 percent.
-
Figure
Turning to its third quarter results, Merck & delivered solid performance with revenue of $18.1 billion, dollars, reflecting increased contributions from new products...
-
Fading
I remain very pleased with the substantial progress Merck & is making across its business, driven by strong execution, growing contributions from new product launches…
Source quote
“I remain very pleased with the substantial progress we're making across our business, driven by strong execution, growing contributions from new product launches... Earlier this year, we provided insight into greater than $70 billion of commercial opportunity we have from over 20 new products that we expect will transform our portfolio and, in many cases, the practice of medicine as well as fuel growth well into the next decade.”
Tone
How upbeat the language was, compared with other companiesiTone counts positive minus negative finance words, adjusted for length. Executives mostly speak positively, so the labels compare each call with every company's latest call: “typical” is the middle third, “very upbeat” the top tenth, “cautious” the bottom tenth.. Dot: Q3 2026. Ring: Q2 2026.
Script and answers carried a similar tone, so the script's message held up under questioning.
Sentences that drove the tone
“Finally, we also expect underlying operating expenses to increase at a mid to high single digit rate, reflecting our conviction in the significant opportunity from our expanding pipeline and the...”
“The opportunity we have to drive strong long-term growth beyond the Keytruda LOE period is becoming increasingly clear as we achieve these scientific and commercial milestones.”
“In cardiometabolic and respiratory, WinRiver continued its momentum with global sales of $694 million, an increase of 94%, reflecting strong demand from adults with pulmonary arterial hypertension, as well as...”
Full figures
USD · SEC EDGAR XBRL (10-Q, period end 2026-09-30)
| Metric | Q3 2026period end 2026-09-30 | Q2 2026period end 2026-06-30 | Change | Q3 2025 | YoY |
|---|---|---|---|---|---|
| Revenue | 18.09B | 16.61B | +8.9% | 17.28B | +4.7% |
| Gross profit | 13.19B | 12.21B | +8.0% | 13.42B | −1.7% |
| Operating income | 5.56B | -683.0M | Turned profit | 6.75B | −17.6% |
| Net income | 5.07B | -1.33B | Turned profit | 5.79B | −12.4% |
| EPS | 2.04 | -0.54 | Turned profit | 2.32 | −12.1% |
| P/E today 148.2 | 146.8 | 102.8 | +44.0 | 11.1 | +135.7 |
Topics
Most discussed now
- In oncology, last weekend's ESMO meeting showcased potential practice-changing advances for several innovative programs highlighted by the…
- This momentum extends across multiple therapeutic areas and modalities, and there is much more to come, with numerous significant…
- Merck & delivered solid performance in the quarter, driven by increasing contributions from its compelling array of important new products…
- The Trove Fuse program is guided by a two-pronged development strategy.
- Starting with oncology, data from several pivotal studies were presented at ESMO, which exemplify Merck &'s clinical development approach…
Faded since Q2 2026
- Dropped As an oral macrocyclic peptide, LIPFENDRA has the potential to extend the reach of this therapeutic approach globally.
- Dropped As Merck & has talked to the administration's FDA, and this will be the one that goes for national priority vouchers.
- Fading While Merck & is delivering for patients today, it is also making substantial investments in the next generation of innovative medicines…
- Fading Merck & has seen physician and patient adoption increase since the permanent J-code was established in April.
Latest announcements
Official filings, newest first.
- Results of operations · SEC 8-K
- Director or officer change · SEC 8-K
- Results of operations · SEC 8-K
- Shareholder vote results · SEC 8-K · routine
- Other events · SEC 8-K
- Results of operations · SEC 8-K
- Results of operations · SEC 8-K
- Other events · SEC 8-K