Merck (NYSE:MRK) Stock Price Forecast: $105 Price, 2028 Keytruda Cliff And 50% Upside

NYSE:MRK Deep Value Setup After The Keytruda Panic

NYSE:MRK trades around $105.26, below a $107.59 one year high and far from the ~$135 2024 peak, giving a market cap of about $261.26 billion and a trailing P E near 13.9. Q3 2025 results show revenue of $17.28 billion up roughly 3.7% year on year, non GAAP EPS at $2.58 up more than 60% year on year, and net margin above 33%, yet the equity is priced as if earnings will structurally compress after 2028. The market is discounting the Keytruda patent event as a permanent earnings reset, while the data across oncology, vaccines, respiratory and Animal Health supports a slower erosion and a credible replacement lane.

Earnings Momentum And Segment Mix Behind NYSE:MRK

In the latest quarter, $17.28 billion of revenue translated into about $5.79 billion of net income, an 83% increase versus the prior year, with EBITDA around $8.15 billion up nearly 48%. Non GAAP EPS of $2.58 beat the $2.35 consensus by about 10%, and net profit margin expanded to roughly 33.5 from the low twenties a year earlier. In 2024, total revenue was about $64.2 billion, with roughly $29.5 billion or 47% from Keytruda, $8.6 billion or 13% from Gardasil, $5.0 billion or 8% from other oncology, around $4.5–5.8 billion or 7–9% from Animal Health, about $2.8 billion from Januvia and Janumet, and roughly $13.8 billion or 21% from Winrevair, Capvaxive and the rest of the portfolio. The mix is still heavily skewed to oncology, but the earnings growth and margin expansion show that NYSE:MRK is already monetizing newer launches and cost discipline, not just legacy assets.

Keytruda Dependence And The 2028 Patent Cliff Debate For NYSE:MRK

Keytruda remains the core risk and driver. With $29.5 billion of sales in 2024 and a realistic path toward ~$32 billion in 2025, it accounts for nearly half of pharma revenue and a disproportionate share of profit. The U S patent loss in 2028 opens the door to PD 1 biosimilars, and many analysts model a 30–60% revenue decline in the years after generics arrive. That fear is visible in valuation. At roughly 12–13.8x forward earnings versus a healthcare median around 18x, an EV EBITDA near 9.1x versus peers around 14.5x, and a PEG ratio near 0.24, the market is valuing NYSE:MRK as if a large portion of current cash flows will be permanently impaired. The key question is whether Keytruda collapses or rolls down gradually while new products scale up.

Keytruda Qlex And The Real Shape Of The Post 2028 Oncology Curve

The subcutaneous Keytruda QLEX, approved in September 2025, changes the trajectory of that curve. Moving from an infusion taking around thirty minutes to an injection administered in about one minute is a material advantage for hospitals and patients, and the new patents extend protection beyond the 2028 loss on the original I V formulation. Management expects QLEX to migrate roughly 30–40% of the U S Keytruda population into a later exclusivity window, effectively converting a theoretical “cliff” into a multi year step down. Combined with entrenched physician familiarity, real world outcomes and reimbursement pathways built around Keytruda, this gives NYSE:MRK a stronger oncology moat than the headline patent date suggests. Current pricing of the stock assumes that this mitigation is either marginal or will fail, which is inconsistent with the company’s history of lifecycle management.

Winrevair Capvaxive And Respiratory Assets As The New Growth Spine

Beyond Keytruda, the growth spine is already visible in pulmonary, vaccines and respiratory. Winrevair generated about $360 million in Q3 2025 alone, up roughly 141% year on year, and is approaching $1 billion of cumulative sales in under a year. With peak estimates between $5–7.2 billion against a pulmonary arterial hypertension market that could reach around $9.3 billion by 2034, Winrevair is a realistic future profit engine. Capvaxive produced roughly $244 million in Q3 and is tracking toward more than $2 billion in peak pneumococcal vaccine sales as adult share builds and potential label expansion is explored. The Verona Pharma deal for about $10 billion brought in Ohtuvayre, which targets COPD with potential peak revenue of $2–3 billion in a structurally large chronic market. Add Enlicitide, an oral PCSK9 in Phase 3 with $1–2 billion potential, and an early stage GLP 1 collaboration with Hansoh, and NYSE:MRK has multiple shots on goal to build a diversified earnings base by the early 2030s.

Cash Flow Balance Sheet And Dividend Firepower At NYSE:MRK

Financially, NYSE:MRK is positioned to fund that transition without stressing the balance sheet. Trailing twelve month operating cash flow is around $17.1 billion, with Q3 2025 cash from operations near $7.82 billion and free cash flow around $6.03 billion in the quarter despite investment activity. Cash and short term investments stand at roughly $18.21 billion, up about 24.8% year on year, while total assets are about $129.55 billion and total liabilities near $77.64 billion, leaving equity of roughly $51.91 billion. Net change in cash in Q3 was about $10.19 billion, driven by strong financing flows and operating performance. Total debt of around $41.4 billion is manageable against this cash generation and asset base. Analysts project free cash flow moving toward $20 billion in 2026 and potentially $26.4 billion by 2028, giving room to fund M and A, R and D, and distributions simultaneously.

Profitability Quality And Operating Leverage At NYSE:MRK

Profitability metrics are not those of a business in structural decline. Gross margin sits around 77.9–81.9%, versus a sector median near the mid fifties. EBIT margin is about 42.3%, EBITDA margin near 49.1%, and net income margin roughly 29.6–33.5%, all multiple times higher than typical large cap pharma peers. Return on equity is close to 39.5%, with return on assets around 14.7% and return on capital near 19.8%, supported by improving cost efficiency. Operating expenses in Q3 2025 were about $6.48 billion, down almost 23% year on year even as revenue grew, and R and D spend has been reduced by roughly 50% versus 2023 while still maintaining a deep pipeline. This combination of high margins and disciplined spending is why EBITDA grew almost 48% on mid single digit revenue growth, and why the market’s low multiple looks inconsistent with the underlying quality metrics.

Technical Structure Suggests A False Breakdown In NYSE:MRK

The long term chart for NYSE:MRK reinforces the idea of a mispriced fear event rather than a broken franchise. Since 2009, the stock has traded in a rising channel that provided support through the 2020 pandemic crash and the 2022 bear market. In 2025, price briefly broke below the lower boundary, dropping about 25% to a July low near $73.31, but then found support at the 200 week moving average. By late November 2025, the share price reclaimed the lower edge of that channel, turning the breakdown into a likely shakeout rather than a new downtrend. Today’s quote around $105–106 sits near the 0.618 Fibonacci retracement of the prior decline, with a secondary resistance zone around $118 at the 0.786 level and a major high at $135. If the stock can consolidate above $103–105 and then clear $118, the channel projects an upper band target near $160, implying about 50% upside from current levels, with an invalidation zone defined around $95–100.

Valuation Scenarios And Return Profile For NYSE:MRK

On valuation, almost every mainstream metric signals discount. At a forward P E around 11.7–13.8x, NYSE:MRK trades at roughly half the healthcare sector median. EV EBITDA near 9.1x is about 37% below peers around 14.5x, and the EV EBIT multiple near 10.6x is around 46% lower. Price to sales near 4.2x is roughly in line with the five year average despite EBIT margin improving from about 31% to more than 42%, meaning investors are paying the same multiple for a much more profitable dollar of revenue. The dividend yield around 3.12–3.23% sits in the top quartile of healthcare, compared with a sector median near 1.7%, and the payout ratio of about 37% leaves room for dividend growth alongside reinvestment. Conservative long term modeling that assumes high single digit revenue declines after 2028, modest margin compression and zero real terminal growth still points to roughly 7% annualized equity returns, while more balanced scenarios that assume stabilization and 2% terminal growth can deliver double digit returns with 40–50% upside as the multiple rerates.

Key Risks Around Keytruda Pricing And Pipeline Execution For NYSE:MRK

The central risk remains deeper or faster Keytruda erosion than currently modeled. If biosimilar competition after 2028 drives price cuts and volume losses at the high end of the 30–60% range and QLEX uptake disappoints, earnings compression could exceed current expectations and prolong the low multiple. Pipeline execution is another critical variable. Winrevair, Capvaxive, Ohtuvayre, Enlicitide and future GLP 1 programs all carry clinical, regulatory and commercial risk; if several of these assets underperform versus peak estimates, the revenue gap after Keytruda will be harder to close. Geographic and product specific issues such as the 24% decline in Gardasil sales due to inventory and demand problems in China, which historically accounts for 60–70% of international Gardasil revenue, add uncertainty, even if that franchise is a smaller portion of the whole. Policy and pricing pressure, including the Inflation Reduction Act and Medicare price negotiations, could further compress top line and margins on major drugs. Finally, the aggressive external growth strategy, including the $11.5 billion Acceleron deal, the $10 billion Verona acquisition and the roughly $9.2 billion Cidara transaction, raises integration and overpayment risk that could dilute returns if synergy targets are missed.

Is NYSE:MRK A Buy Sell Or Hold Heading Into The Post Keytruda Era

Putting the numbers together, the risk reward around NYSE:MRK is skewed to the upside for investors with a multi year horizon. The stock trades around $105.26, within a year range of $73.31–107.59, on a forward P E in the low teens, an EV EBITDA in single digits, a dividend yield above 3%, and profitability metrics that rank at the top of large cap healthcare. Keytruda concentration and the 2028 patent event justify a discount, but the combination of QLEX, Winrevair, Capvaxive, Ohtuvayre and broader pipeline depth argues against the collapse implied by current multiples. Strong free cash flow, an improving balance sheet and consistent dividend growth add further support, while the technical pattern points to a likely false breakdown with a plausible channel target near $160 if execution remains solid. On balance, across the operational, financial and technical evidence, the stock deserves a clear Buy stance rather than a Hold, with downside risk anchored around the $95–100 support zone and upside potential of roughly 40–50% if the market gradually reprices the post Keytruda trajectory and ongoing insider and institutional behavior, visible via Merck insider activity, remains supportive.

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