Merck stock surged 65% due to Keytruda success, revenue growth, but potential threats ahead.

From Nasdaq: 2024-09-08 22:22:23

Merck stock (NYSE: MRK) has surged over 65% in value since January 2021, reaching $115 today, driven by a 50% revenue increase to $62 billion. However, MRK underperformed the S&P in 2023 but has shown consistent growth. The Trefis High Quality Portfolio has outperformed the S&P each year.

Merck’s Keytruda drug has been a key revenue driver, with sales reaching $25 billion in 2023. Keytruda’s success has led to significant growth, but biosimilars could impact sales in the future. Merck is also pursuing inorganic growth through acquisitions to mitigate potential revenue losses.

Despite Keytruda’s success, Merck faces challenges such as increased competition and loss of market exclusivity. The company’s diabetes drug Januvia will see a significant decline in sales due to a lower Medicare price. Merck’s operating margin has contracted, but future growth is expected to be driven by Keytruda.

Investors have rewarded Merck with a higher valuation multiple, but the stock is currently fully priced. With potential threats to Keytruda’s sales, waiting for a dip may be prudent. Merck is projected to deliver mid-single-digit growth, primarily due to Keytruda. Check Peer Comparisons for more insights on industry metrics.

Merck has shown varying returns over the years, with a current YTD return of 8%. The Trefis Reinforced Value Portfolio has also delivered significant returns. Invest wisely with Trefis Market-Beating Portfolios and explore Price Estimates for more insights.



Read more at Nasdaq: Why Did Merck Stock Rise 65%?