Merck & Company (MRK) AI Stock Analysis

• Market Cap: $211.08B
• Dividend Yield: 3.81%
• Average Volume (3M): 15.21M
• Price to Earnings (P/E): 12.2
• Beta (1Y): 0.39
• Revenue Growth: 4.40%
• EPS Growth: 654.93%
• Country: US
• Employees: 73,000
• Sector: Healthcare
• Sector Strength: 42
• Industry: Drug Manufacturers - General
• EPS (TTM): 2.13
• Shares Outstanding: 2,511,031,300
• 10 Day Avg. Volume: 10,533,157
• 30 Day Avg. Volume: 15,210,976
• PEG Ratio: 6.33
• Price to Book (P/B): 4.40
• Price to Sales (P/S): 0.00
• P/FCF Ratio: 12.39
• Enterprise Value/Market Cap: 1.12
• Enterprise Value/Revenue: 1.50
• Enterprise Value/Gross Profit: 9.52
• Enterprise Value/Ebitda: 3.74
• 1Y Price Target: $104.07
• Price Target Upside: 23.80% Upside
• Rating Consensus: Moderate Buy
• Number of Analyst Covering: 16

• Rating: 80 Outperform
• Price Target: $94.00 ▲(11.82%Upside)

Merck & Company's robust financial performance and attractive valuation are the primary strengths supporting its stock score. The strong pipeline and growth potential add to its long-term appeal, despite current challenges with Gardasil sales in China and tariff impacts.

Positive Factors

Product Launch

Ohtuvayre, a product from Verona Pharma, has shown a strong trajectory since its launch, surpassing expectations.

Revenue Potential

Upcoming readouts could meaningfully expand Merck's long-term revenue potential and reinvigorate interest in the stock.

Strategic Acquisition

MRK shares are trading up approximately 3% following the announcement of the Verona acquisition.

Negative Factors

Earnings Impact

The deal is expected to negatively impact non-GAAP EPS by ~$0.16 in the first 12 months.

Growth Uncertainty

Uncertainty around Merck's Gardasil franchise and lack of clarity around growth beyond the Keytruda LOE will continue to pressure shares.

Regulatory Challenges

Significant macro, regulatory, and commercial overhangs for Gardasil and Keytruda will continue to pressure the stock.

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 generates revenue primarily through the sales of its pharmaceutical products and vaccines. The company's revenue model is based on a diverse portfolio of patented drugs and vaccines, which are marketed globally. Key revenue streams include blockbuster drugs such as Keytruda, an immuno-oncology therapy used in cancer treatment, and Gardasil, a vaccine for human papillomavirus (HPV). Additionally, Merck earns income from its animal health division, which provides veterinary pharmaceuticals and services. Strategic partnerships and collaborations with other pharmaceutical and biotech companies, as well as investments in research and development, also play a significant role in driving Merck's earnings. The company benefits from a strong global presence, extensive patent portfolio, and continuous innovation in healthcare solutions.

Merck & Company Financial Statement Overview

Summary

Merck & Company demonstrates strong profitability with consistent revenue growth and robust margins. However, recent declines in revenue and asset base could pose future challenges.

Income Statement

Merck & Company has demonstrated consistent revenue growth from $41.52 billion in 2020 to $63.92 billion in TTM (Trailing-Twelve-Months) 2025. The gross profit margin is robust at 81.98% TTM, indicating efficient cost management. Net profit margin is strong at 27.27% TTM, reflecting solid profitability. The EBIT and EBITDA margins at 36.94% and 40.50% TTM, respectively, show a healthy operational performance. However, a slight decline in revenue from 2024 to 2025 suggests potential challenges in sustaining growth.

Balance Sheet

The balance sheet is solid, with a debt-to-equity ratio of 0.72 TTM, indicating a manageable level of leverage. Return on equity (ROE) is impressive at 36.07% TTM, showcasing effective use of shareholder funds. The equity ratio stands at 49.13% TTM, suggesting a stable capital structure. Nonetheless, a decreasing trend in total assets over the recent periods could indicate potential risks in asset management.

Cash Flow

Operating cash flow remains strong at $20.88 billion TTM, supporting healthy free cash flow of $17.04 billion. The free cash flow to net income ratio is substantial, highlighting solid cash generation relative to profits. However, a decrease in free cash flow growth rate from 2024 to 2025 may signal future liquidity pressures if not addressed.

Breakdown	Dec 2024	Dec 2023	Dec 2022	Dec 2021	Dec 2020
Income Statement
Total Revenue	64.17B	60.12B	59.28B	48.70B	41.52B
Gross Profit	48.98B	43.99B	41.87B	35.08B	27.90B
EBITDA	25.71B	6.91B	21.32B	17.90B	10.18B
Net Income	17.12B	365.00M	14.52B	13.05B	7.07B
Balance Sheet
Total Assets	117.11B	106.67B	109.16B	105.69B	91.59B
Cash, Cash Equivalents and Short-Term Investments	13.69B	7.09B	13.19B	8.10B	8.05B
Total Debt	37.11B	35.05B	30.69B	33.10B	31.79B
Total Liabilities	70.73B	69.04B	63.10B	67.44B	66.18B
Stockholders Equity	46.31B	37.58B	45.99B	38.18B	25.32B
Cash Flow
Free Cash Flow	18.10B	9.14B	14.71B	9.66B	5.57B
Operating Cash Flow	21.47B	13.01B	19.09B	14.11B	10.25B
Investing Cash Flow	-7.73B	-14.08B	-4.96B	-16.55B	-9.44B
Financing Cash Flow	-7.03B	-4.81B	-9.12B	2.59B	-2.83B

Merck & Company Technical Analysis

• Technical Analysis Sentiment: Negative
• Last Price: 84.06
• 50DMA: Positive
• 100DMA: Positive
• 200DMA: Negative
• MACD: Negative
• RSI: Neutral
• STOCH: Negative

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 84.06 is above the 20-day moving average (MA) of 82.40, above the 50-day MA of 79.82, and below the 200-day MA of 89.15, indicating a neutral trend. The MACD of 0.91 indicates Negative momentum. The RSI at 53.15 is Neutral, neither overbought nor oversold. The STOCH value of 81.04 is Negative, 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
MRK	80 Outperform	$211.08B	12.24	39.31%	3.81%	4.40%	654.93%
NVS	78 Outperform	$221.18B	16.71	32.82%	3.44%	12.83%	-11.92%
AZN	78 Outperform	$223.38B	28.65	19.81%	2.14%	15.48%	22.70%
SNY	74 Outperform	$121.08B	20.59	7.34%	0.09%	-4.57%	2.96%
AMGN	73 Outperform	$162.01B	27.50	105.67%	3.07%	15.59%	56.99%
PFE	66 Neutral	$140.94B	17.97	8.62%	7.03%	13.38%	―
Sector *	46 Neutral	C$205.70M	-3.34	-23.14%	2.45%	20.79%	-0.36%

Merck & Company Corporate Events

Merck & Co. Announces New Restructuring Program

On July 25, 2025, Merck & Co. announced a new restructuring program aimed at advancing its pipeline and launching new products, which will involve reducing certain positions and optimizing its manufacturing network. The program is expected to be completed by the end of 2027, with some manufacturing actions extending to 2029, and aims to achieve $3 billion in annual cost savings by reinvesting in strategic growth areas. In the second quarter of 2025, Merck reported a 2% decrease in total worldwide sales to $15.8 billion compared to the same period in 2024, with notable growth in KEYTRUDA sales but a significant decline in GARDASIL sales. The company also announced the acquisition of Verona Pharma and received FDA approval for ENFLONSIA, highlighting its strategic focus on innovation and growth.

The most recent analyst rating on (MRK) stock is a Buy with a $145.00 price target. To see the full list of analyst forecasts on Merck & Company stock, see the MRK Stock Forecast page.

Merck & Co. Concludes Annual Shareholders Meeting

On May 27, 2025, Merck & Co., Inc. held its Annual Meeting of Shareholders where several key decisions were made. The meeting resulted in the election of board members, approval of executive compensation, and ratification of the company’s accounting firm for 2025. However, shareholder proposals regarding human rights impact assessment, tax transparency, DEI goals in executive pay, and civil liberties in advertising services were not approved.

The most recent analyst rating on (MRK) stock is a Buy with a $145.00 price target. To see the full list of analyst forecasts on Merck & Company stock, see the MRK Stock Forecast page.