Merck Shares Rise 8% on Q1 Earnings Beat and Higher 2026 Guidance

TLDR

• Merck KGaA Q1 net profit fell 9.4% year-on-year to €669 million, but beat EPS forecasts of €1.99 with a print of €2.11.
• Net sales dipped 2.8% to €5.13 billion, also topping estimates of €5.09 billion.
• The company raised its 2026 adjusted EBITDA guidance to €5.7–€6.1 billion, up from €5.5–€6.0 billion.
• Electronics was a standout, driven by AI and high-performance computing materials demand.
• Generic competition for MS drug Mavenclad was pushed back from March to May, giving Life Science more runway.

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(SeaPRwire) –   Merck KGaA delivered a mixed yet better-than-expected first quarter on Wednesday, with profits declining slightly but surpassing Wall Street’s expectations for both earnings and revenue. The stock surged 8% to reach a two-month high after the results.

Merck & Co., Inc., MRK

Net profit totaled €669 million, down 9.4% compared to the same period last year, or €2.11 per share — exceeding forecasts of €1.99. Net sales decreased 2.8% to €5.13 billion, still beating estimates of €5.09 billion. Foreign exchange headwinds impacted performance, though underlying demand proved more resilient than anticipated.

Merck KGaa Q1 26 Earnings:

-Net Sales: €5.13B (est €5.08B)
– Adj EBITDA: €1.53B (est €1.46B)
– Adj EPS: €2.11 (est €1.95)
– Sees FY Net Sales: €20.4B To €21.4B (est €20.89B)
– Sees FY Adj EBITDA: €5.7B To €6.1B (est €5.84B)
– Sees FY Adj EPS: €7.30 To €8.20, Saw…

— First Squawk (@FirstSquawk) May 13, 2026

The company also updated its full-year 2026 guidance higher, a move that clearly satisfied investors.

Adjusted EBITDA for the year is now projected between €5.7 billion and €6.1 billion, up from the prior range of €5.5 billion to €6.0 billion. Net sales guidance was set at €20.4 billion to €21.4 billion. Organic sales growth outlook was raised to 0%–3% from the previous -1% to 2%.

Electronics Leads the Way

The Electronics division stood out as the strongest performer in the quarter. Demand for materials used in advanced semiconductors—particularly those supporting AI infrastructure and high-performance computing—drove significant growth.

This trend is not new for Merck, but the AI-driven demand continues to provide a consistent tailwind for the unit.

First-quarter adjusted EBITDA for the group amounted to €1.53 billion, down just 0.3%, and well ahead of analyst consensus of €1.46 billion.

Life Science Gets Extra Time

The Life Science division also exceeded expectations. Revenue grew 8.3% on a currency-adjusted basis, supported in part by a customer replenishing inventory and others stocking up lab supplies due to supply chain disruptions caused by the Iran conflict.

Merck had previously indicated that U.S. sales of its multiple sclerosis drug Mavenclad would begin declining in March following the entry of generic competitors. That timeline has now been delayed until May, extending the division’s period of full-priced sales.

To offset Mavenclad’s future revenue decline, Merck is relying on therapies for rare cancers acquired through its $3.9 billion purchase of SpringWorks Therapeutics last year.

Morgan Stanley analyst Thibault Boutherin stated he expects Merck to outperform going forward, noting that implied full-year figures—including improved foreign exchange impacts—suggest a 1% upside to consensus EBITDA and EPS estimates.

The results also represent an early success for new CEO Kai Beckmann, who assumed leadership from his role as head of the electronics division earlier this month.

Organic EPS guidance was increased to €7.50–€8.20, up from €7.10–€8.00, while EBITDA organic growth guidance shifted to -2% to 2% from the prior -4% to 1%.