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J&J or Merck? Key Factors Investors Must Weigh Right Now

Wednesday, Mar 18, 2026 11:12 am ET5min read

Aime Summary

- Johnson & JohnsonJNJ-- (J&J) and MerckMRK-- (MRK) are leading U.S. healthcare861075-- firms with strengths in oncology, but differ in portfolio diversification and growth drivers.

- J&JJNJ-- benefits from diversified pharmaceuticals, medical devices, and a robust R&D pipeline, while MRKMRK-- relies heavily on Keytruda, its top-selling cancer drug facing 2028 patent expiry.

- J&J outperformed in 2025 with 6.5% sales growth and rising estimates, whereas MRK’s EPS forecasts dropped 39% due to M&A costs and vaccine/diabetes drug declines.

- Analysts highlight J&J’s stronger momentum, consistent dividend growth, and $32B+ R&D/M&A investments versus MRK’s valuation risks and reliance on uncertain post-Keytruda growth.

Johnson & Johnson JNJ and Merck MRK are among the top U.S. healthcare giants, making them ideal candidates for a direct comparison.

Both companies have established strengths in oncology, immunology and neuroscience. J&JJNJ-- has a broader portfolio spanning cardiovascular and metabolic diseases, pulmonary hypertension, infectious diseases, and a sizable medical devices business.

Merck stands out for its strong footprint in vaccines, virology and hospital acute care.

Both companies are contending with upcoming patent expirations and challenges from the Medicare Part D redesign. So, which stock looks more attractive today? A closer look at their fundamentals, growth outlook and risks can help investors decide.

The Case for J&J

J&J’s biggest strength lies in its diversified business model, as it operates through pharmaceuticals and medical devices divisions. It has more than 275 subsidiaries and boasts 28 platforms or products with more than $1 billion in annual sales. Its diversification helps it withstand economic cycles more effectively. It also boasts strong cash flows and has consistently increased dividends for 63 consecutive years.

J&J’s Innovative Medicine unit is showing a growth trend. The segment’s sales rose 4.1% on an organic basis in 2025 despite loss of exclusivity (LOE) of blockbuster drug Stelara and the negative impact of the Part D redesign. Growth was driven by J&J’s key drugs like Darzalex, Erleada and Tremfya. New drugs like Carvykti, Tecvayli, Talvey, Rybrevant and Spravato also contributed significantly to growth.

J&J’s MedTech business has improved in the past three quarters, driven by the acquired cardiovascular businesses, Abiomed and Shockwave, as well as Surgical Vision and wound closure in Surgery. Improvements in J&J’s electrophysiology business also drove growth. MedTech sales rose 4.3% on an organic basis in 2025.

J&J also rapidly advanced its pipeline in 2025, attaining significant clinical and regulatory milestones that will help drive growth through the back half of the decade. In 2025, it gained approval for new products like Inlexzoh/TAR-200, a first-of-its-kind drug-releasing system, for treating high-risk non-muscle invasive bladder cancer and Imaavy (nipocalimab) for treating generalized myasthenia gravis. In 2025, J&J invested more than $32 billion in R&D and M&A, including the acquisitions of Intra-Cellular Therapies and Halda Therapeutics.

J&J believes 10 of its new products/pipeline candidates in the Innovative Medicine segment have the potential to deliver peak sales of $5 billion, including Talvey, Tecvayli, Imaavy, Caplyta, Inlexzo, Rybrevant plus Lazcluze and Icotyde.

However, J&J faces its share of headwinds like the legal battle surrounding its talc lawsuits, the Stelara patent cliff, the upcoming LOE of key drugs Opsumit and Simponi, and softness in MedTech China.

The Case for MRK

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. The drug has played an instrumental role in driving Merck’s steady revenue growth over the past few years. Keytruda recorded sales of $31.7 billion in 2025, up 7% year over year.

Keytruda’s sales are gaining from rapid uptake across earlier-stage indications. Continued strong momentum in metastatic indications is also boosting sales growth. 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. MerckMRK-- expects Keytruda to achieve peak sales of $35 billion by 2028. Merck’s other oncology drugs, Welireg, AstraZeneca-partnered Lynparza and Eisai-partnered Lenvima, are also contributing to top-line growth.

Merck’s Animal Health business is a key contributor to its top-line growth, with sales expected to more than double by mid-2030s.

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. 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 hold the potential to generate significant revenues over the long term.

The company was on an acquisition spree last year in response to the upcoming 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.

However, sales of Gardasil, Merck’s second-largest product, are declining due to weak performance in China resulting from sluggish demand trends amid an economic slowdown. Gardasil sales are not expected to improve in 2026. Sales of some other Merck vaccines like Proquad, M-M-R II, Varivax, Rotateq and Pneumovax 23 also declined in 2025. MRKMRK-- is also seeing declining demand for its diabetes products (Januvia/Janumet) and the generic erosion of some drugs like Isentress/Isentress HD, Bridion and Dificid.

Merck is heavily reliant on Keytruda. There are rising concerns about the firm’s ability to grow its non-oncology business ahead of the upcoming loss of exclusivity of Keytruda in 2028.

Also, competitive pressure might increase for Keytruda in the near future from dual PD-1/VEGF inhibitors, such as Summit Therapeutics’ ivonescimab, 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.

Nonetheless, Merck’s new products, Winrevair, Welireg and Capvaxive, key pipeline progress and expansion of its respiratory and infectious disease portfolios through the acquisitions of Verona Pharma and Cidara Therapeutics have improved its long-term growth prospects.

How Do Estimates Compare for JNJJNJ-- & MRK?

The Zacks Consensus Estimate for J&J’s 2026 sales and EPS implies a year-over-year increase of 6.5% and 7.0%, respectively. The Zacks Consensus Estimate for 2026 earnings has risen from $11.47 to $11.54 over the past 60 days, while that for 2027 earnings has gone up from $12.25 per share to $12.43 over the same time frame.