Merck & Co. (MRK): 3Q26 Earnings Preview: Expect Continued Uneven Near-Term Financials; Focus Remains on Pipeline Updates

Despite somewhat noisy financials in recent quarters, MRK has been the best performer YTD in US Pharma, on the back of a series of positive clinical events that have served to de-risk the $70bn of potential revenues by the mid 2030s that management has outlined to offset the Keytruda patent cliff. Just before 3Q26 results, the upcoming ESMO conference will bring several updates relevant for incremental confidence on the company's oncology pipeline and will determine the setup into and out of earnings. Heading into 3Q26 results, MRK has continued to message softer earnings in 2027, pointing to continued investment in launches and clinical trials, in addition to the Blackstone deal that was contra R&D this year. Topline growth for next year has also been noted as modest, driven by increasing contribution from new launches and animal health, offset by LOE products and OUS Keytruda pricing headwinds from German austerity measures;