Merck reported a solid fourth quarter for 2025, but the stock dipped about 3% in early trading due to a conservative 2026 forecast.
Earnings Beat: Merck reported an adjusted EPS of $2.04, slightly beating the analyst consensus of $2.01.
Revenue: Q4 sales reached $16.4 billion (up 5% year-over-year), driven by its powerhouse cancer drug, Keytruda, which brought in $8.37 billion alone.
The 2026 Outlook (The "Miss"): The company projects 2026 revenue between $65.5B and $67B, which is below the $67.6B analysts were hoping for.
Key Headwinds: CEO Rob Davis noted that "legacy products" are losing patent protection (notably the diabetes drug Januvia). Additionally, the company is absorbing a $3.65 per share charge related to its acquisition of Cidara Therapeutics.
PayPal Holdings (PYPL): Leadership Shakeup & Stock Plunge
PayPal had a much rougher morning, with shares tumbling over 15–16% after missing both earnings and revenue estimates while announcing a major CEO transition.
Earnings Miss: PayPal reported Q4 EPS of $1.23, missing the expected $1.29. Revenue also fell short at $8.68 billion (vs. $8.79 billion expected).
New CEO Appointed: The Board has appointed Enrique Lores (current HP Inc.
CEO) as the new President and CEO, effective March 1, 2026. He replaces Alex Chriss. Jamie Miller will act as Interim CEO until March. Growth Concerns: The "branded checkout" business (the core PayPal button) saw a sharp slowdown, growing only 1% compared to 8% in previous quarters. This suggests stiff competition from Apple Pay and Stripe is taking a toll.
Dividends: In a rare bit of positive news for income seekers, the Board declared a quarterly cash dividend of $0.14 per share.
Quick Stock Comparison (As of Feb 3, 2026)
| Metric | Merck (MRK) | PayPal (PYPL) |
| Current Price Activity | Down ~3% | Down ~16% |
| Q4 EPS | $2.04 (Beat) | $1.23 (Miss) |
| 2026 Revenue Guidance | $65.5B – $67.0B | Mid-single-digit decline warned for Q1 |
| Main Challenge | Patent expirations (Januvia) | Branded checkout competition |
It is a heavy news day for both PayPal (PYPL) and Merck (MRK) as they both released critical earnings reports and future guidance this morning, February 3, 2026.
Both stocks are down today, though for different reasons: PayPal is dealing with a major leadership change and growth misses, while Merck is facing a "patent cliff" and acquisition charges.
1. PayPal Holdings (PYPL)
Stock Action: Plunging over 16% in early trading.
Earnings Miss: Reported Q4 adjusted EPS of $1.23, missing the $1.29 consensus. Revenue was $8.68 billion, also below expectations.
CEO Shakeup: The Board named Enrique Lores (former CEO of HP Inc.) as the new President and CEO, effective March 1, 2026. He replaces Alex Chriss, whose pace of execution was reportedly "not in line with Board expectations."
The "Branded Checkout" Problem: A major red flag for investors was the growth in "branded checkout" (the core PayPal button), which slowed to just 1% growth this quarter, down from 8% in previous quarters.
Dividend News: In a bid to satisfy shareholders, PayPal declared a quarterly cash dividend of $0.14 per share.
2. Merck & Co. (MRK)
Stock Action: Down roughly 3% following a cautious 2026 outlook.
Solid Q4 Performance: Merck actually beat estimates for the end of 2025, with revenue of $16.4 billion (up 5% year-over-year).
Weak 2026 Guidance: The stock fell because management issued a 2026 profit forecast of $5.00–$5.15 per share, significantly lower than the $5.63 analysts expected.
Acquisition Impact: This low guidance includes a massive one-time charge of $3.65 per share related to the acquisition of Cidara Therapeutics.
Drug Performance:
Keytruda: Continues to be a powerhouse with $8.37B in quarterly sales.
Gardasil: Underperformed, with sales dropping 34% due to lower demand in China and Japan.
Januvia: Facing heavy pressure as it loses patent protection.
Summary Comparison
| Feature | PayPal (PYPL) | Merck (MRK) |
| Market Reaction | 📉 Sharp Drop (-16%) | 📉 Moderate Drop (-3%) |
| Primary News | CEO transition & growth slowdown | Weak 2026 guidance & acquisition costs |
| Q4 EPS | $1.23 (Miss) | $2.04 (Beat) |
| Key Risk | Losing market share to Apple/Stripe | Patent expirations on major drugs |
: Mixed Results & Patent Woes){kind=link}
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