The positive sentiment engendered by Merck‘s (NYSE:MRK) solid third-quarter results posted on Thursday carried over into the following trading session. It wasn’t only the vibes; several analysts tracking the durable pharmaceutical company raised their price targets on its equity. The stock climbed more than 2% as a result, in contrast to the S&P 500 index’s relatively steep decline of 1.8%.
A third-quarter trouncing
Investors found plenty to like about Merck’s quarterly figures. Total sales grew by 5% to over $18 billion, predictably driven by its blockbuster cancer drug Keytruda. Net income not under generally accepted accounting principles (non-GAAP, or adjusted) fell by 4%, but the metric was still well in the billions at nearly $6.2 billion.
Missed AI’s “Act 1”? Act 2 Could Be 15x Bigger. Most investors think they missed the AI boat because they didn’t buy Nvidia in 2005. But according to our analysts, we’re only at the end of “Act 1″—the R&D phase. “Act 2” is the global rollout. Continue »
Image source: Getty Images.
Both figures easily topped the average analyst estimates, as did management’s top- and bottom-line guidance for the entirety of 2026.
Several pundits tracking Merck wasted little time lifting their price targets on the stock. Exactly half of this country’s “big four” banks did so, with Bank of America (NYSE:BAC) Securities’ Jason Gerberry ticking his higher, to $165 per share from $163. His peer Chris Schott of JPMorgan Chase (NYSE:JPM) unit J.P. Morgan upped his to $175 per share from $165. Both analysts maintained their equivalents of buy recommendations.
The right mix
I wasn’t all that shocked about Merck’s convincing top- and bottom-line beats, as it has a generally solid lineup of popular medications led by Keytruda (although there’s some fear about the future given that the drug is approaching its patent cliff).
It also has quite an active pipeline, so there’s a fine chance for it to end up with another blockbuster in its mix.
Meanwhile, the company trades at forward levels that are basically in line with other pharmaceuticals while paying a relatively generous dividend, currently yielding 2.3%. I think this is a solid play in the healthcare space with room to grow, if modestly, and it’s a fine income stock too.
Should you buy stock in Merck right now?
Before you buy stock in Merck, consider this:
The Motley Fool Stock Advisor analyst team just identified what they believe are the 10 best stocks for investors to buy now… and Merck wasn’t one of them. The 10 stocks that made the cut could produce monster returns in the coming years.
Consider when Netflix made this list on December 17, 2004… if you invested $1,000 at the time of our recommendation, you’d have $334,631!* Or when Nvidia made this list on April 15, 2005… if you invested $1,000 at the time of our recommendation, you’d have $1,312,844!*
Now, it’s worth noting Stock Advisor’s total average return is 893% — a market-crushing outperformance compared to 213% for the S&P 500. Don’t miss the latest top 10 list, available with Stock Advisor, and join an investing community built by individual investors for individual investors.
See the 10 stocks »
*Stock Advisor returns as of October 30, 2026.
JPMorgan Chase is an advertising partner of Motley Fool Money. Bank of America is an advertising partner of Motley Fool Money. Eric Volkman has no position in any of the stocks mentioned. The Motley Fool has positions in and recommends JPMorgan Chase and Merck. The Motley Fool has a disclosure policy.
