The Best and Worst Dow Stocks for the Next 12 Months

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5. Merck & Co. Inc. (NYSE:MRK)

Upside Potential: 34.7%

Market Cap: $198 billion

Number of Hedge Fund Holders: 91

Merck & Co. Inc. (NYSE:MRK) is a global pharmaceutical company known for its innovations in vaccines, oncology, infectious diseases, and animal health products. The company’s blockbuster drugs, including Keytruda and Gardasil, contribute significantly to its revenue growth.

In its Q1 2025 earnings results on April 24, the company reported quarterly revenue of $15.5 billion and adjusted EPS of 2.22, which came in 2%-4% ahead of street expectations. Revenue for its GARDASIL product decreased 41% due to lower demand from China, which led to total revenue falling 2% year over year. The company maintained its 2025 revenue guidance of $64.1-$65.6 billion and guided the adjusted EPS to be between $8.82 and $8.97.

While there are near-term challenges, analysts see it as a fundamentally stronger company, and the consensus opinion on the stock remains broadly positive with substantial upside potential. As evidence, Leerink Partners analyst Daina Graybosch reiterated a Buy rating on the stock on April 25. The analyst was encouraged by the company’s efforts to localize its manufacturing and focus on inventory buildup to offset pressures from potential tariffs. Merck & Co. Inc.’s (NYSE:MRK) strong pipeline and success in recent trials should keep investors positive, despite concerns over the Keytruda 2028 loss-of-exclusivity. Therefore, the analyst maintained his optimistic view.

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