Why is Merck stock rallying today?

Merck stock rose 2.1% in pre-open trading after the company posted a standout third-quarter earnings report before the market opened, with adjusted earnings per share of $2.49 — well ahead of the roughly $2.09 analysts had anticipated — and revenue of $18.1 billion that surpassed the consensus estimate of approximately $17.3 billion.

Management raised the low end of its full-year revenue forecast to $66.8 billion and lifted its adjusted earnings outlook to a range of $2.77 to $2.82 per share, up from the prior guidance of $2.66 to $2.76.

Keytruda sales climbed 6% from the year-ago quarter to $8.6 billion, topping analyst estimates of $8.0 billion, with $830 million of that total coming from the newer subcutaneously administered version of the drug, Keytruda QLEX.

WINREVAIR sales surged 93% year-over-year to $694 million, underscoring the company’s progress in diversifying its revenue base beyond Keytruda.

On the analyst front, JPMorgan issued a new $165 price target on the stock, while Jefferies maintained its Buy rating and raised its target to $177, reflecting broad institutional confidence in Merck’s pipeline trajectory following the results.

The Federal Reserve held its benchmark rate at 3.75%–4.00% in a 10-2 vote the prior evening, describing economic activity as expanding at a strong pace while noting that inflation remains elevated.

U.S. equity futures pointed to a softer tech-led open, with Nasdaq 100 futures down about 1% and S&P 500 futures off roughly 0.25%, meaning Merck’s pre-market advance was achieved against a cautious broader backdrop. GDP and PCE inflation data were also due for release this morning, adding to macro uncertainty across the market.

The combination of a decisive earnings beat, a raised full-year profit outlook, and strong performance from both Keytruda and newer growth products gave investors a clear company-specific reason to bid the stock higher, allowing Merck to stand out sharply from a flat-to-negative pre-market tape.

While longer-term questions around Keytruda’s patent cliff in 2028 remain a background concern, today’s results offered tangible evidence that the pipeline — from QLEX to WINREVAIR to oncology assets in development — is gaining meaningful commercial traction.