- Eli Lilly’s Omvoh Data Extends Ulcerative Colitis Story And Valuation Appeal
May 12, 2026
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Eli Lilly's Omvoh (mirikizumab) has shown durable disease clearance over four years in patients with moderately to severely active ulcerative colitis. The long term data adds to existing evidence on Omvoh's efficacy and safety in inflammatory bowel disease. The results reinforce Eli Lilly's position in immunology and provide new information for clinicians and patients considering chronic treatment options.
Eli Lilly (NYSE:LLY) enters this update with Omvoh's four year results adding another data point to its immunology portfolio. The stock trades at $966.99, with the share price up 28.9% over the past year and up 127% over the past three years. That performance sits alongside a very large 5 year return of about 7x, which many investors link to the company building out its pipeline and established products.
For investors, the new Omvoh data feeds into the broader question of how much value to place on Eli Lilly's chronic disease treatments over long treatment periods. The extended evidence in ulcerative colitis may shape how the market thinks about durability of revenues from immunology therapies, alongside existing views on the rest of the NYSE:LLY portfolio.
Stay updated on the most important news stories for Eli Lilly by adding it to your watchlist or portfolio. Alternatively, explore our Community to discover new perspectives on Eli Lilly.NYSE:LLY Earnings & Revenue Growth as at May 2026
📰 Beyond the headline: 2 risks and 4 things going right for Eli Lilly that every investor should see.
Quick Assessment
✅ Price vs Analyst Target: At $966.99, Eli Lilly trades about 20% below the $1,209 analyst price target. ✅ Simply Wall St Valuation: Shares are flagged as trading 31.1% below the platform's estimated fair value. ✅ Recent Momentum: The stock is up 2.9% over the last 30 days.
There is only one way to know the right time to buy, sell or hold Eli Lilly. Head to Simply Wall St's company report for the latest analysis of Eli Lilly's Fair Value.
Key Considerations
📊 The four year Omvoh data strengthens the case for Eli Lilly's ulcerative colitis franchise as part of its broader immunology revenue mix. 📊 Keep an eye on Omvoh uptake, pricing decisions and any label expansions that could influence long term contribution to earnings. ⚠️ One major risk highlighted is the high level of non cash earnings, which can make headline profit figures harder to interpret.
Dig Deeper
For the full picture, including more risks and rewards, check out the complete Eli Lilly analysis. Alternatively, you can check out the community page for Eli Lilly to see how other investors believe this latest news will impact the company's narrative.
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This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned.
Companies discussed in this article include LLY.
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- PRIMECAP Management's Strategic Moves: AstraZeneca PLC Exits with a -2.57% Impact
May 11, 2026
This article first appeared on GuruFocus.
Exploring PRIMECAP Management (Trades, Portfolio)'s Recent 13F Filing and Investment Strategies
Warning! GuruFocus has detected 3 Warning Sign with LLY. Is LLY fairly valued? Test your thesis with our free DCF calculator.
PRIMECAP Management (Trades, Portfolio) recently submitted its 13F filing for the first quarter of 2026, offering a glimpse into its strategic investment decisions during this period. Founded in 1983 in Pasadena, CA, PRIMECAP Management (Trades, Portfolio) Company operates as an independent investment management firm. The company manages U.S.-focused equity portfolios for a select group of institutions and mutual funds. PRIMECAP's investment philosophy is rooted in four key principles: individual decision-making, commitment to fundamental research, a long-term investment horizon, and a focus on value. The firm employs a multi-counselor investment model, granting each portfolio manager autonomy over a distinct segment of each fund. PRIMECAP seeks stocks poised to outperform the market over a three to five-year horizon, often targeting undervalued companies and industries. This approach allows the firm to maintain its course even when short-term fundamentals appear challenging, driven by conviction from thorough research.
Key Position Increases
PRIMECAP Management (Trades, Portfolio) also increased stakes in a total of 75 stocks, among them:
The most notable increase was Adobe Inc (NASDAQ:ADBE), with an additional 1,054,640 shares, bringing the total to 4,730,846 shares. This adjustment represents a significant 28.69% increase in share count, a 0.2% impact on the current portfolio, with a total value of $1,149,974,050. The second largest increase was Boeing Co (NYSE:BA), with an additional 786,810 shares, bringing the total to 795,910. This adjustment represents a significant 8,646.26% increase in share count, with a total value of $158,409,970.
Summary of Sold Out
PRIMECAP Management (Trades, Portfolio) completely exited 8 holdings in the first quarter of 2026, as detailed below:
AstraZeneca PLC (NYSE:AZN): PRIMECAP Management (Trades, Portfolio) sold all 36,915,261 shares, resulting in a -2.57% impact on the portfolio. CyberArk Software Ltd (CYBR): PRIMECAP Management (Trades, Portfolio) liquidated all 30,500 shares, causing a -0.01% impact on the portfolio.
Key Position Reduces
PRIMECAP Management (Trades, Portfolio) also reduced positions in 177 stocks. The most significant changes include:
Reduced Micron Technology Inc (NASDAQ:MU) by 2,920,732 shares, resulting in an -11.78% decrease in shares and a -0.63% impact on the portfolio. The stock traded at an average price of $391.72 during the quarter and has returned 93.90% over the past 3 months and 178.78% year-to-date. Reduced KLA Corp (NASDAQ:KLAC) by 438,315 shares, resulting in a -15.24% reduction in shares and a -0.4% impact on the portfolio. The stock traded at an average price of $1,463.03 during the quarter and has returned 24.88% over the past 3 months and 52.05% year-to-date.
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Portfolio Overview
At the first quarter of 2026, PRIMECAP Management (Trades, Portfolio)'s portfolio included 320 stocks. The top holdings included 6.68% in Eli Lilly and Co (NYSE:LLY), 5.82% in Micron Technology Inc (NASDAQ:MU), 3.39% in Alphabet Inc (NASDAQ:GOOGL), 2.83% in AstraZeneca PLC (NYSE:AZN), and 2.83% in KLA Corp (NASDAQ:KLAC).
The holdings are mainly concentrated in all 11 industries: Technology, Healthcare, Industrials, Consumer Cyclical, Financial Services, Communication Services, Energy, Consumer Defensive, Basic Materials, Real Estate, and Utilities.
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- Barclays Sees Reinforced Long-Term Growth Narrative for Eli Lilly and Company (LLY)
May 11, 2026
We recently compiled a list of the 10 Best Cancer Stocks to Buy for the Long Term. Eli Lilly and Company is one of the best cancer stocks.
TheFly reported on May 5 that Barclays increased its valuation outlook for LLY, raising the price target to $1,400 from $1,350 while maintaining an Overweight rating. The adjustment followed the company’s first-quarter earnings update, which led to higher estimates. The firm highlighted that strong ongoing demand for tirzepatide is reinforcing investor attention on the company’s broader long-term growth narrative, shifting focus back to its core pipeline strength and market positioning after the recent results.
In a separate development, on May 6, Eli Lilly and Company (NYSE:LLY) announced an additional $4.5 billion investment across two of its manufacturing sites in Lebanon, Indiana, expanding its long-term capital commitment in the state to more than $21 billion since 2020. The decision was driven by expected growth in demand for its medicines and continued expansion of its pipeline.Barclays Sees Reinforced Long-Term Growth Narrative for Eli Lilly and Company (NYSE:LLY)
The funding will support advanced production capabilities, including updated manufacturing technologies at its active pharmaceutical ingredient facility and the development of its dedicated genetic medicine production site. This expansion reflects the company’s ongoing efforts to strengthen its U.S.-based manufacturing and support future therapeutic development.
Eli Lilly and Company (NYSE:LLY) is a global pharmaceutical company based in Indianapolis that is expanding its oncology portfolio. Alongside its strong diabetes and obesity business, it is growing in precision cancer therapies for breast, lung, and blood cancers through strategic acquisitions and development programs.
While we acknowledge the potential of LLY as an investment, we believe certain AI stocks offer greater upside potential and carry less downside risk. If you're looking for an extremely undervalued AI stock that also stands to benefit significantly from Trump-era tariffs and the onshoring trend, see our free report on the best short-term AI stock.
READ NEXT: Top 10 AI-Powered Biotech Stocks to Buy Right Now and 9 Most Undervalued Healthcare Stocks to Buy Now.
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- Tech Dominates; Nvidia’s Market Value Exceeds Entire Healthcare Sector of S&P 500
May 11, 2026
The tech sector has a record-high market cap of over $23 trillion, a 37% weighting in the S&P 500, the largest percentage ever.
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- Eli Lilly, GLP-1 Troubles Are Dragging Down This Healthcare ETF
May 11, 2026
Eli Lilly faces challenges in the GLP-1 market, with Novo Nordisk gaining a timing advantage in both injectable and oral drug approvals.
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- Advanced Micro Devices and Other Growth Stocks Are Flying High. History Says Hold on to Them.
May 11, 2026
If it feels like growth stocks can’t continue their outperformance much longer, ignore that feeling. The Vanguard S&P 500 Growth Index Fund Exchange-Traded Fund, home to companies with high sales growth including Nvidia Advanced Micro Devices Microsoft and Eli Lilly is up 13% in the past month. A couple of factors have driven the performance of the growth stocks.
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- NVO Rallies 21% in a Month: How Should Investors Play the Stock?
May 11, 2026
Shares of Novo Nordisk NVO have surged 21.3% over the past month, driven by stronger-than-expected first-quarter 2026 results and favorable regulatory developments. The company’s growth continues to be powered by its semaglutide-based portfolio, including Ozempic and Rybelsus for type II diabetes (T2D), and Wegovy for chronic weight management. Strong demand for Wegovy and Ozempic, along with an encouraging early launch contribution from the Wegovy pill, helped Novo Nordisk comfortably beat earnings and revenue expectations in the first quarter. Together, these products generated DKK 63.25 billion, accounting for nearly 65% of total quarterly revenues.
Investor sentiment also improved after Novo Nordisk modestly raised its 2026 outlook, signaling that management may be regaining control following months of slowing-growth concerns. The company now expects adjusted sales and operating profit to decline 4-12% at CER in 2026 versus its earlier forecast of a 5-13% decline, supported by rising GLP-1 demand, especially in obesity care, broader treatment adoption and continued Wegovy launches in new markets. However, visibility remains clouded by pricing pressure in the United States, weaker injectable GLP-1 prescription trends, reduced Medicaid obesity coverage and intensifying competition from Eli Lilly LLY. Additional risks include the MFN pricing agreement, gradual semaglutide exclusivity losses in certain markets and elevated spending on R&D, manufacturing and commercial expansion.
To strengthen its competitive position, Novo Nordisk is rapidly expanding its product portfolio and label opportunities. Novo Nordisk also continues to advance multiple next-generation obesity and diabetes candidates to reinforce its long-term growth outlook. Let's delve deeper to better understand NVO’s key strengths against its near-term challenges.
Semaglutide — Still NVO’s Primary Top-Line Driver
Novo Nordisk’s success has been driven by the sales of Ozempic, Rybelsus and Wegovy. The company boasts one of the industry's broadest diabetes and obesity care portfolios.
Ozempic and Wegovy are the major revenue drivers. Novo Nordisk is expanding access to Wegovy through broader distribution and partnerships with major U.S. pharmacies, telehealth providers and proprietary and third-party platforms to ensure patients can obtain authentic, FDA-approved treatments. This has largely mitigated the compounded alternatives problem in 2026.
Novo Nordisk is expanding semaglutide's reach through new indications. Wegovy injection is now approved for reducing major cardiovascular events, easing HFpEF symptoms and relieving osteoarthritis-related knee pain in obesity. NVO has also secured approval of oral Wegovy — the first GLP-1 therapy in pill form for weight management — in the United States and was launched in early 2026.
Story Continues
In April, the company reported positive late-stage data for oral semaglutide in children and adolescents with T2D and recently secured FDA approval for oral Ozempic for adults with T2D, with a U.S. launch expected soon. Novo Nordisk also plans to pursue U.S. and EU label expansions for Rybelsus and oral Ozempic in pediatric T2D later this year. The rollout of oral Ozempic alongside oral Wegovy could improve treatment convenience, adherence and patient access.
Rybelsus’ label in the United States and the EU has been expanded to include cardiovascular benefits in T2D patients. A 7.2 mg Wegovy dose, showing up to 25% weight loss in the STEP UP study, has been approved in the EU and the United States. Label expansion is also being sought for Ozempic injection in treating peripheral artery disease in the United States and the EU.
Competition Heating Up in the Obesity Space
Competition in the obesity market remains a major overhang for NVO. Eli Lilly continues to strengthen its position in the obesity and diabetes markets, raising questions about Novo Nordisk’s ability to defend market share and maintain pricing power over time. LLY also comprehensively beat earnings and revenue estimates in the first quarter of 2026, driven by robust volume growth in its tirzepatide (GLP-1) medicines, including Mounjaro for T2D and Zepbound for obesity.
Despite being on the market for just over three years, these drugs have become LLY’s key top-line drivers, together generating $12.82 billion in first-quarter revenues, which accounted for around 65% of the company’s total revenues. Eli Lilly also recently secured FDA approval of its oral GLP-1 drug, orforglipron, for adults with obesity or overweight with weight-related medical problems, marketed under the brand name Foundayo. The drug competes directly with NVO’s Wegovy pill.
The obesity space is also attracting new contenders to challenge the incumbents. Smaller biotech firms, like Viking Therapeutics VKTX and Structure Therapeutics GPCR, are advancing GLP-1–based therapies to challenge the incumbents. Viking Therapeutics’ dual GIPR/GLP-1 receptor agonist, VK2735, is being developed both as oral and subcutaneous formulations for the treatment of obesity. Viking plans to advance oral VK2735 into phase III development for obesity in the fourth quarter of 2026. Structure Therapeutics’ phase II ACCESS study on its orally administered GLP-1 RA, aleniglipron, demonstrated significant weight loss across all doses. Structure Therapeutics expects to initiate the late-stage program of aleniglipron in obesity in the second half of 2026.
NVO Expands Footprint in Rare Diseases and Liver Care
Beyond its GLP-1 portfolio, Novo Nordisk is broadening its presence in rare diseases. The company has submitted a regulatory filing seeking approval for Mim8 in hemophilia A in the United States. NVO has also secured both EU and U.S. approvals for Alhemo to treat hemophilia A and B, with or without inhibitors.
The FDA has also granted accelerated approval to Wegovy as the first GLP-1 therapy to treat noncirrhotic metabolic dysfunction-associated steatohepatitis with moderate-to-advanced liver fibrosis. This marked a significant milestone in liver care by offering patients a treatment that can both halt disease activity and reverse liver damage.
NVO Focuses on Next-Generation Drugs
Novo Nordisk is also developing several next-generation obesity candidates in its pipeline, especially targeting the lucrative U.S. market. NVO has submitted a regulatory filing seeking the approval of CagriSema injection, a follow-up drug to Wegovy, for obesity. It is also gearing up to launch a dedicated late-stage program evaluating cagrilintide as a monotherapy for obesity.
Meanwhile, Novo Nordisk’s mid-stage asset, amycretin, has shown strong weight-loss efficacy in a phase II study and is slated to enter phase III soon. The company has bolstered its pipeline through several major collaborations and acquisition deals.
NVO also received FDA approval for Awiqli, the first once-weekly long-acting basal insulin (icodec) for adults with T2D, to be used alongside diet and exercise for glycemic control. Already approved in several global markets, the drug’s U.S. clearance further strengthens its diabetes portfolio and reinforces its position in the treatment landscape.
NVO’s Stock Price, Valuation & Estimates
Year to date, Novo Nordisk shares have lost 9.4% compared with the industry’s 4.5% decline. The company has also underperformed the sector and the S&P 500 during the same time frame, as seen in the chart below.
NVO Stock Underperforms the Industry, Sector & the S&P 500Zacks Investment Research
Image Source: Zacks Investment Research
Novo Nordisk is trading at a discount to the industry, as seen in the chart below. Going by the price/earnings ratio, the company’s shares currently trade at 13.48 forward earnings, which is lower than 16.40 for the industry. The stock is trading much below its five-year mean of 29.25.
NVO Stock ValuationZacks Investment Research
Image Source: Zacks Investment Research
Earnings estimates for 2026 have improved from $3.37 to $3.43 per share over the past 30 days. During the same time frame, Novo Nordisk’s 2027 earnings estimates have decreased from $3.41 to $3.40.
NVO Estimate MovementZacks Investment Research
Image Source: Zacks Investment Research
Here’s How to Play NVO Stock
Despite the recent rally, near-term visibility for Novo Nordisk, currently carrying a Zacks Rank #3 (Hold), remains limited due to persistent pricing pressure, intensifying competition from Eli Lilly, weaker prescription trends for injectable GLP-1 therapies and ongoing regulatory and reimbursement uncertainties. While NVO continues to execute well operationally and has modestly improved its 2026 outlook, it still projects a decline in adjusted sales and operating profit this year. Given these headwinds, the stock may remain volatile in the short to medium term, making it less attractive for investors seeking near-term upside until there is greater clarity on market-share trends, pricing dynamics and the long-term competitive positioning of its obesity franchise. You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
That said, long-term investors should continue to view Novo Nordisk favorably given its strong fundamentals, leadership in diabetes and obesity care, expanding cardiometabolic portfolio and deep late-stage pipeline. The company continues to broaden semaglutide’s reach through new formulations and label expansions while advancing next-generation obesity and rare disease candidates that could support future growth. Investors already holding the stock may benefit from staying invested for long-term wealth creation, while those looking to initiate positions could consider accumulating shares gradually during periods of weakness, particularly given the stock’s current valuation discount relative to historical levels.
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- Merck Stock Down 7% in a Month: Should Investors Hold or Exit?
May 11, 2026
Merck’s MRK stock has declined 7.3% in the past month despite announcing a solid first-quarter 2026 report on April 30. Merck beat estimates for both earnings and sales. Total revenues rose 5% to $16.3 billion, helped by strong growth from Keytruda and Winrevair. However, the company incurred a loss of $1.28 per share in the quarter due to a one-time charge of $3.62 per share related to the acquisition of Cidara, which closed in the first quarter. Even though the acquisition will benefit the company in the long run, a reported loss can limit investor optimism. The company also slightly raised its sales range, which may have been below investor expectations.
Also, in late April, the company faced a pipeline setback, which resulted in the stock’s recent sell-off. Merck and Eisai’s phase III LITESPARK-012 study evaluating two triplet combinations of blockbuster PD-L1 inhibitor, Keytruda plus Lenvima, failed to meet its main goals in previously untreated patients with advanced clear cell renal cell carcinoma, a common form of kidney cancer.
However, a single quarter’s results are not so important for long-term investors to make an investment decision. Let’s understand the company’s strengths and weaknesses to better analyze how to play Merck stock in the post-earnings scenario.
Keytruda: Merck’s Biggest Strength
Merck boasts more than six blockbuster drugs in its portfolio, with Keytruda being the key top-line driver. Keytruda, approved for several types of cancer, alone accounts for around 55% of the company’s pharmaceutical sales. Keytruda now holds 44 FDA-approved indications spanning 19 tumor types, along with two tumor-agnostic approvals.
The drug has played an instrumental role in driving Merck’s steady revenue growth over the past few years. Keytruda recorded sales of $8.0 billion in the first quarter of 2026, up 8% year over year.
Keytruda sales are gaining from continued strong momentum in metastatic indications and rapid uptake across earlier-stage launches. The company expects the growth to continue till it loses patent exclusivity in 2028.
Merck is working on different strategies to drive Keytruda's long-term growth. These include innovative immuno-oncology combinations, including Keytruda with LAG3 and CTLA-4 inhibitors. In partnership with Moderna MRNA, Merck is developing a personalized mRNA therapeutic cancer vaccine called intismeran autogene (V940/mRNA-4157) in combination with Keytruda in pivotal phase III studies for earlier-stage and adjuvant NSCLC and adjuvant melanoma.
Merck expects Keytruda to achieve peak sales of $35 billion by 2028. Merck’s other oncology drugs, Welireg, AstraZeneca (AZN)-partnered Lynparza and Eisai-partnered Lenvima, are also contributing to top-line growth.
Story Continues
Merck’s Animal Health business is also a key contributor to its top-line growth, with sales expected to more than double by mid-2030s.
MRK’s Pipeline Progress & Recent M&A Spree
Merck’s expanding drug pipeline and potential new blockbuster drugs beyond Keytruda look encouraging.
Its phase III pipeline has almost tripled since 2021, supported by in-house pipeline progress as well as the addition of candidates through M&A deals. Merck expects to launch 20 new drugs by 2030, with many already launched.
Some key new products with blockbuster potential are its 21-valent pneumococcal conjugate vaccine, Capvaxive, and pulmonary arterial hypertension drug, Winrevair. Both products have witnessed a strong launch and have the potential to generate significant revenues over the long term.
Merck’s RSV antibody, Enflonsia (clesrovimab), was approved in the United States in June 2025 and in the EU in April 2026. A once-daily, single-tablet two-drug regimen of doravirine and islatravir, Idvynso, was approved in the United States for virologically suppressed HIV-1 in April 2026.
Merck has other promising candidates in its late-stage pipeline, such as enlicitide decanoate/MK-0616, an oral PCSK9 inhibitor for hypercholesterolemia, tulisokibart, a TL1A inhibitor for ulcerative colitis and Daiichi-Sankyo-partnered antibody-drug conjugates.
Merck has been on an acquisition spree in the past year, as it faces the looming patent expiration of Keytruda in 2028. The acquisition of Verona in 2025 added Ohtuvayre, a novel, first-in-class maintenance treatment for chronic obstructive pulmonary disease, with multibillion-dollar commercial potential. Ohtuvayre's commercial launch is off to a solid start.
In January 2026, Merck acquired Cidara Therapeutics, which added its lead pipeline candidate, MK-1406 (formerly CD388), a first-in-class long-acting, strain-agnostic antiviral agent, currently being evaluated in late-stage studies for the prevention of seasonal influenza in individuals at higher risk of complications.
In April 2026, it acquired California-based cancer biotech, Terns Pharmaceuticals, which added Terns’ lead chronic myeloid leukemia candidate, TERN-701, a novel oral allosteric inhibitor of the BCR::ABL oncogene, to Merck’s hematology/cancer pipeline. Merk believes TERN-701 has multibillion-dollar commercial potential.
Declining Sales of MRK’s Gardasil & Other Vaccines
Sales of Merck’s second-largest product, its HPV vaccine, Gardasil, plunged 22% to $1.07 billion in the first quarter due to continued weak sales performance in China. Sales of Gardasil are declining in China due to weak demand trends amid an economic slowdown. The company is also seeing lower demand for the vaccine in Japan. Gardasil sales are not expected to improve in 2026.
Sales of some other Merck vaccines, like Proquad, M-M-R II, Varivax, Rotateq and Vaxneuvance, also declined in the first quarter.
MRK’s Keytruda Faces Patent Expiration in 2028
Merck is heavily reliant on Keytruda. Though Keytruda may be Merck’s biggest strength and a solid reason to own the stock, the company is excessively dependent on the drug. Keytruda’s core U.S. patent is expected to expire around 2028, with additional patents expiring slightly after that. Keytruda is expected to face significant biosimilar competition around 2028-2029. Once biosimilars enter, Keytruda’s sales are likely to decline sharply.
Also, competitive pressure might increase for Keytruda in the near future from dual PD-1/VEGF inhibitors that inhibit both the PD-1 pathway and the VEGF pathway at once. They are designed to overcome the limitations of single-target therapies like Keytruda.
MRK’s Generic Headwinds in 2026
MRK is seeing declining demand for its diabetes products (Januvia/Janumet) and the generic erosion of some drugs like Isentress/Isentress HD and Bridion in the European Union and Dificid in the United States. Bridion is expected to lose patent exclusivity in the United States in July 2026, and sales are expected to significantly decline thereafter. Sales of Januvia/Janumet are expected to decline steeply from 2026 onward due to government price setting, an anticipated patent expiry in 2026 and ongoing competitive pressure.
In 2026, Merck expects generic competition for Januvia/Janumet, Bridion and Dificid to hurt revenues by approximately $2.5 billion.
MRK Share Price, Valuation & Estimates
Merck’s shares have risen 38.4% in the past year compared with an increase of 17.3% for the industry. The stock has also outperformed the sector as well as the S&P 500 index.
Merck Stock Outperforms Industry, Sector & S&P 500Zacks Investment Research
Image Source: Zacks Investment Research
From a valuation standpoint, Merck looks slightly expensive. Going by the price/earnings ratio, the company’s shares currently trade at 16.79 forward earnings, slightly higher than 16.40 for the industry. The stock is also trading above its 5-year mean of 12.70. However, the stock is cheaper than other drugmakers like Eli Lilly LLY and J&J JNJ.
MRK Stock ValuationZacks Investment Research
Image Source: Zacks Investment Research
Estimates for MRK’s 2026 earnings have risen from $4.87 to $4.88 per share over the past 30 days, while those for 2027 have declined from $9.85 per share to $9.77 per share.
MRK Estimate MovementZacks Investment Research
Image Source: Zacks Investment Research
Stay Invested in MRK Stock
Merck has one of the world’s best-selling drugs in its portfolio, generating billions of dollars in revenues. Though Keytruda will lose patent exclusivity in 2028, its sales are expected to remain strong until then. Merck’s new products, Winrevair, Welireg and Capvaxive, key pipeline progress and expansion of its respiratory and infectious disease and oncology portfolios through the acquisitions of Verona Pharma, Cidara Therapeutics and Terns Pharmaceuticals have improved its long-term growth prospects.
Merck expects over $70 billion of potential non-risk-adjusted commercial opportunity for the current pipeline by the mid-2030s. This estimate is more than double the peak consensus sales estimate for Keytruda of $35 billion in 2028. Merck said that the estimate of $70 billion was $20 billion higher than what they expected just one year ago.
The new products and strong progress in its pipeline have increased confidence that Merck may be able to maintain growth even after Keytruda loses exclusivity.
However, Merck faces several near-term challenges, including persistent challenges for Gardasil in China, potential competition for Keytruda, and rising competitive and generic pressure on some of its drugs. Also, estimates have declined recently due to costs related to its various M&A deals.
Long-term investors may continue retaining this Zacks Rank #3 (Hold) stock and see how the company manages its future product and pipeline growth and replaces Keytruda revenues. However, short-term investors may reduce their position in the stock as there seems to be limited prospects for growth in the near term. You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
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- Eli Lilly CFO Lucas Montrace Explains What Drove 56% Year-over-Year Revenue Beat
May 11, 2026
Eli Lilly CFO Lucas Montrace joins Ashley Mastronardi on NYSE Live to discuss his YOY Revenue Beat
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- Exclusive: Lilly halts India obesity awareness campaign after regulatory scrutiny, seeks rules clarity
May 11, 2026 · reuters.com
Eli Lilly paused its obesity awareness campaign in India after the nation's drugs regulator warned the company it could violate rules against advertising prescription medicines to consumers even indirectly, according to a letter seen by Reuters.
