Merck Earnings: Strong Core Product Gains Help Mitigate Expected COVID-19 Sales Decline

Merck reported strong first-quarter results slightly above our projections, and we don't expect any major changes to the firm's fair value estimate. While total sales fell 5% operationally, the expected decline from COVID-19 treatment Lagevrio was the main driver of the decline, as the remaining portfolio was up 15%. We expect the remainder of the year to show improving growth because year-over-year comparisons become easier (the majority of Lagevrio sales in 2022 occurred in the first quarter).