Merck's Shares Drop 7% After Guidance Downgrade, Secures U.S. IVF Deal
Merck's shares have taken a hit, dropping by around 7% following a downgrade in guidance. The pharmaceutical giant has, however, secured a significant shop deals with the U.S. government, offering IVF drugs at an 84% discount via the TrumpRx platform. Meanwhile, the company has announced a change in leadership, with Kai Beckmann set to take over as CEO from Belén Garijo in 2026.
The downgraded guidance has missed the original 2021 revenue target of €25 billion, with the 2025 guidance remaining at €20.5–21.7 billion. Merck's stock is currently at a crossroads, with short-term challenges and long-term strategic shifts potentially influencing investor decisions. Despite the recent dip, the stock is severely oversold, with an RSI of 26.7, and hovers 6% above its 52-week low.
Merck's expansion has been robust, with over €11.5 billion invested in capital expenditures and acquisitions since 2021. This includes strategic takeovers like SpringWorks Therapeutics and JSR’s chromatography business. The company's slickdeals with the U.S. government includes protection from U.S. tariffs and expanded market access for its IVF drugs.
Looking ahead, Merck's 2026 forecast includes low- to mid-single-digit organic revenue growth and stable EBITDA margins. The company's medium-term target is mid-single-digit annual organic revenue growth and a 100-basis-point expansion in EBITDA margins.
Merck's stock decline follows a guidance downgrade, but the company has secured a significant shop deals with the U.S. government. With a change in leadership on the horizon, Merck's focus on strategic growth and expansion remains clear. Despite short-term challenges, the company's long-term prospects appear promising.
