Merck & Company (MRK) AI Stock Analysis

• Market Cap: $212.69B
• Dividend Yield: 3.86%
• Average Volume (3M): 11.65M
• Price to Earnings (P/E): 13.0
• Beta (1Y): 0.46
• Revenue Growth: 2.00%
• EPS Growth: 20.01%
• Country: US
• Employees: 73,000
• Sector: Healthcare
• Sector Strength: 51
• Industry: Drug Manufacturers - General
• EPS (TTM): 2.13
• Shares Outstanding: 2,497,783,200
• 10 Day Avg. Volume: 12,203,780
• 30 Day Avg. Volume: 11,651,888
• PEG Ratio: <0.01
• Price to Book (P/B): 5.44
• Price to Sales (P/S): 3.93
• P/FCF Ratio: 13.92
• Enterprise Value/Market Cap: 1.06
• Enterprise Value/Revenue: 3.55
• Enterprise Value/Gross Profit: 4.63
• Enterprise Value/Ebitda: 9.02
• 1Y Price Target: $101.00
• Price Target Upside: 21.97% Upside
• Rating Consensus: Moderate Buy
• Number of Analyst Covering: 16

• Rating: 75 Outperform
• Price Target: $93.00 ▲(12.31% Upside)

Merck's strong financial performance and attractive valuation are key strengths, supported by a strategic focus on innovation and cost optimization. However, challenges in revenue growth and competitive pressures in certain markets temper the overall outlook.

Positive Factors

Strong Oncology Pipeline

Merck's robust oncology pipeline, including KEYTRUDA's approvals, positions the company for sustained growth in the high-demand cancer treatment market.

Successful Product Launches

The successful launch of ENFLONSIA into new therapeutic areas demonstrates Merck's capability to innovate and expand its product offerings, supporting long-term growth.

Capital Structure Strengthening

The $6 billion notes offering enhances Merck's capital structure, providing financial flexibility to support growth initiatives and operational stability.

Negative Factors

Decline in Revenue Growth

A decline in revenue growth suggests challenges in market expansion and product sales, potentially affecting long-term profitability and market position.

Competitive Pressures from Biosimilars

Competitive pressures from biosimilars can erode market share and pricing power, impacting revenue from key products like pembrolizumab.

Challenges in China Market

Significant sales decline in China for GARDASIL highlights market-specific challenges that could hinder growth in a key international market.

Merck & Company Business Overview & Revenue Model

Company Description

Merck & Co., Inc. operates as a healthcare company worldwide. It operates through two segments, Pharmaceutical and Animal Health. The Pharmaceutical segment offers human health pharmaceutical products in the areas of oncology, hospital acute care, immunology, neuroscience, virology, cardiovascular, and diabetes, as well as vaccine products, such as preventive pediatric, adolescent, and adult vaccines. The Animal Health segment discovers, develops, manufactures, and markets veterinary pharmaceuticals, vaccines, and health management solutions and services, as well as digitally connected identification, traceability, and monitoring products. It serves drug wholesalers and retailers, hospitals, and government agencies; managed health care providers, such as health maintenance organizations, pharmacy benefit managers, and other institutions; and physicians and physician distributors, veterinarians, and animal producers. The company has collaborations with AstraZeneca PLC; Bayer AG; Eisai Co., Ltd.; Ridgeback Biotherapeutics; and Gilead Sciences, Inc. to jointly develop and commercialize long-acting treatments in HIV. Merck & Co., Inc. was founded in 1891 and is headquartered in Kenilworth, New Jersey.

How the Company Makes Money

Merck & Company's revenue model is primarily based on the sales of its pharmaceutical products and vaccines. The Human Health segment generates the majority of its revenue, driven by sales of blockbuster drugs such as Keytruda (for cancer treatment) and Gardasil (a vaccine for HPV). The company also earns revenue from its Animal Health segment, which includes pharmaceuticals, vaccines, and diagnostic products for livestock and pets. Additionally, Merck engages in strategic partnerships and collaborations with other pharmaceutical companies, research institutions, and healthcare organizations, which can provide milestone payments, royalties, and shared revenues. The company further invests in research and development to innovate and expand its product pipeline, which is critical for sustaining long-term growth and profitability.

Merck & Company Financial Statement Overview

Summary

Merck & Company demonstrates strong profitability with high margins and a solid balance sheet. However, challenges include a decline in revenue growth and free cash flow, which could impact long-term financial health.

Income Statement

Merck & Company demonstrates strong profitability with a high gross profit margin of 76.6% and a net profit margin of 25.8% in the TTM period. However, the revenue growth rate has declined by 0.48% in the TTM, indicating potential challenges in revenue expansion. The EBIT and EBITDA margins remain robust at 32.1% and 39.4%, respectively, showcasing efficient operational management.

Balance Sheet

The company maintains a healthy balance sheet with a debt-to-equity ratio of 0.72, indicating moderate leverage. The return on equity is strong at 34.9%, reflecting effective use of equity to generate profits. The equity ratio stands at 41.7%, suggesting a solid equity base relative to total assets.

Cash Flow

Cash flow analysis reveals a decline in free cash flow growth by 13.6% in the TTM, which could be a concern. However, the operating cash flow to net income ratio is 0.71, and the free cash flow to net income ratio is 0.79, indicating good cash generation relative to net income.

Breakdown	TTM	Dec 2024	Dec 2023	Dec 2022	Dec 2021	Dec 2020
Income Statement
Total Revenue	63.62B	64.17B	60.12B	59.28B	48.70B	41.52B
Gross Profit	48.73B	48.98B	43.99B	41.87B	35.08B	27.90B
EBITDA	25.04B	25.71B	6.91B	21.32B	17.90B	10.18B
Net Income	16.41B	17.12B	365.00M	14.52B	13.05B	7.07B
Balance Sheet
Total Assets	117.52B	117.11B	106.67B	109.16B	105.69B	91.59B
Cash, Cash Equivalents and Short-Term Investments	8.62B	13.69B	7.09B	13.19B	8.10B	8.05B
Total Debt	35.40B	38.27B	36.27B	31.98B	34.63B	33.42B
Total Liabilities	68.46B	70.73B	69.04B	63.10B	67.44B	66.18B
Stockholders Equity	48.99B	46.31B	37.58B	45.99B	38.18B	25.32B
Cash Flow
Free Cash Flow	14.72B	18.10B	9.14B	14.71B	9.66B	5.57B
Operating Cash Flow	18.53B	21.47B	13.01B	19.09B	14.11B	10.25B
Investing Cash Flow	-7.55B	-7.73B	-14.08B	-4.96B	-16.55B	-9.44B
Financing Cash Flow	-14.74B	-7.03B	-4.81B	-9.12B	2.59B	-2.83B

Merck & Company Technical Analysis

• Technical Analysis Sentiment: Negative
• Last Price: 82.81
• 50DMA: Negative
• 100DMA: Positive
• 200DMA: Negative
• MACD: Positive
• RSI: Neutral
• STOCH: Neutral

Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For MRK, the sentiment is Negative. The current price of 82.81 is below the 20-day moving average (MA) of 84.61, below the 50-day MA of 82.84, and below the 200-day MA of 86.29, indicating a bearish trend. The MACD of 0.43 indicates Positive momentum. The RSI at 46.52 is Neutral, neither overbought nor oversold. The STOCH value of 40.71 is Neutral, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Negative sentiment for MRK.

Merck & Company Peers Comparison

Name	Overall Rating	Market Cap	P/E Ratio	ROE	Dividend Yield	Revenue Growth	EPS Growth
AZN	79 Outperform	$251.27B	30.10	19.76%	1.97%	15.08%	29.15%
NVS	78 Outperform	$243.17B	18.20	32.82%	3.22%	12.38%	-12.67%
MRK	75 Outperform	$212.69B	12.96	35.44%	3.86%	2.00%	20.01%
PFE	73 Outperform	$141.34B	13.06	12.16%	7.16%	14.72%	―
SNY	72 Outperform	$115.53B	11.85	8.39%	4.70%	-9.32%	120.62%
GILD	68 Neutral	$146.24B	22.93	33.26%	2.72%	3.69%	501.26%
Sector *	51 Neutral	$8.02B	-0.31	-43.38%	2.24%	22.31%	-2.14%

Merck & Company Corporate Events

Merck & Co. Closes $6 Billion Notes Offering

On September 9, 2025, Merck & Co., Inc. successfully closed a significant public offering of various notes totaling $6 billion, with maturities ranging from 2027 to 2055. This strategic financial move is expected to strengthen the company’s capital structure and support its ongoing operations and growth initiatives.

The most recent analyst rating on (MRK) stock is a Buy with a $120.00 price target. To see the full list of analyst forecasts on Merck & Company stock, see the MRK Stock Forecast page.