Merck's Latest Quarterly Report Receives a Thumbs Up from Jim Cramer.

Merck's Q1 report showed a small revenue miss but an 11-cent earnings beat, prompting Jim Cramer to say he liked the quarter. The stock fell 2% despite initially dipping lower. Merck develops pharmaceuticals for human and animal health, covering oncology, vaccines, and more. While it has potential, some AI stocks offer greater upside and less downside risk.

Merck & Co., Inc. (NYSE: MRK) released its Q1 earnings report on July 29, 2025, which showed a small revenue miss but an 11-cent earnings beat. The company reported $2.13 earnings per share (EPS), exceeding analysts' consensus estimates of $2.03 by $0.10 [1]. Despite the positive EPS surprise, the stock fell 2% during mid-day trading on Thursday, reaching $78.17. The stock had a trading volume of 19,791,444 shares, compared to its average volume of 11,910,030 [1].

Merck & Co., Inc. had revenue of $15.81 billion for the quarter, which was slightly below analyst estimates of $15.92 billion. The company's net margin was 25.79%, and its return on equity was 41.63%. Merck & Co., Inc. updated its FY 2025 guidance to 8.870-8.970 EPS [1].

Key highlights from the Q1 report include:

1. Revenue Performance: Total revenue fell 2% year over year to $15.8 billion, primarily due to a $1.3 billion decline in Gardasil sales in China. However, excluding this, underlying global sales increased by 7% [2].
2. Earnings Surprise: The company reported adjusted earnings of $2.13 per share, a 7% drop from the previous quarter but still above analysts' expectations.
3. Pipeline and Innovation: Merck & Co., Inc. continues to invest in its pipeline, with over 80 Phase 3 clinical trials underway across various therapeutic areas. The company is also collaborating with other pharmaceutical companies and research institutions to advance innovative treatments.
4. Dividend: Merck & Co., Inc. recently declared a quarterly dividend of $0.81, payable on October 7, 2025, to stockholders of record as of September 15, 2025. The dividend represents a $3.24 annual payout and a yield of 4.1% [1].

Analysts have mixed views on Merck & Co., Inc. stock. Morgan Stanley lowered their price target to $98.00 and set an "equal weight" rating, while Wells Fargo & Company decreased their price objective to $90.00 and also set an "equal weight" rating [1]. Guggenheim reissued a "buy" rating with a $115.00 price objective, while Citigroup reissued a "neutral" rating with a $84.00 price objective [1]. Overall, the stock has a consensus rating of "Hold" with a consensus price target of $107.44 [1].

Merck & Co., Inc. continues to be a leader in the pharmaceutical industry, with a strong focus on innovation and a diverse pipeline. However, some analysts believe that AI stocks may offer greater upside and less downside risk. Long-term investors seeking growth and stability in the healthcare sector may find Merck & Co., Inc. an attractive option.

References:

[1] https://www.marketbeat.com/instant-alerts/merck-co-inc-nysemrk-releases-quarterly-earnings-results-beats-expectations-by-010-eps-2025-07-29/
[2] https://finance.yahoo.com/news/1-blue-chip-dividend-stock-233002072.html