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Research Alert: Mrk Q1 Tops Expectations Fueled By Solid Sales Growth; Lifts Outlook

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-- CFRA, an independent research provider, has providedwith the following research alert. Analysts at CFRA have summarized their opinion as follows:

Merck reported Q1 2026 sales of $16.3B, up 5% Y/Y and $440M above consensus, due to pharmaceutical segment growth of 5% Y/Y to $14.3B and robust Animal Health performance (+13% Y/Y to $1.8B). Non-GAAP loss per share of $1.28 vs. $2.22 earnings in Q1 2025, yet beat the consensus by $0.19, reflecting a $9.0B ($3.62/share) Cidara acquisition charge. We view the continued commercial momentum as supportive of MRK's strategic transformation, with KEYTRUDA delivering $8.0B in sales (+12% Y/Y) across broad-based indications and WINREVAIR revenues nearly doubling to $525M with accelerating U.S. uptake and international expansion. Management raised 2026 sales guidance to $65.8B-$67.0B from $65.5B-$67.0B and lifted non-GAAP EPS to $5.04-$5.16 from $5.00-$5.15, including FX benefits. We think the pending $6.7B Terns acquisition will further strengthen MRK's hematology pipeline with TERN-701, demonstrating continued external innovation efforts in the company's portfolio diversification strategy.

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