What changed
$MRK — BUY 📊 | 6 MONTHS THESIS
🎯 Q1 2026 | Rev $16.3B | EPS $-1.28 vs $-1.47 🟢
💡 Consensus expects FY26 EPS of only $2.74, extrapolating the Q1 loss, while our normalized analysis indicates ~$8+ EPS after adjusting for the transient R&D spike. The market fails to appreciate that the Q1 loss is a one-time accounting event, and the raised full-year revenue guidance signals underlying business strength.
📉 Reward/risk: 2.27:1
🏢 Business Quality: 9/10 - Dominant oncology franchise (Keytruda) with a growing pipeline (TERN-701 in CML), strong vaccine portfolio, and a durable competitive moat, temporarily depressed by a massive but one-time R&D expense.
📊 Valuation: cheap — Normalized P/E: 14.9x ($298B market cap / ~$20B normalized net income), versus historical 13–18x range and a peer group average of 16–18x.
📊 Our read: BUY. Full analysis →
https://stockduty.xyz/s/MRK0612