Merck & Company (MRK)
NYSE:MRK
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Merck & Company
(NYSE:MRK)
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Rating:68Neutral
Price Target:
$127.00
▲(4.60% Upside)
Action:DowngradedDate:03/06/26
MRK scores as moderately attractive: strong underlying financial performance and a reasonable valuation are the primary positives. The score is held back by near-term earnings/catalyst risk from 2026 headwinds (one-time acquisition charge, Gardasil/RSV softness, and ~$2.5B generic/pricing impact) and a mixed technical picture with soft near-term momentum despite a longer-term uptrend.
Positive Factors
High profitability and margins
Merck's very high gross and net margins indicate durable pricing power and operational efficiency across pharmaceuticals, vaccines and biologics. Strong margins support sustained R&D investment, dividends and M&A capacity, allowing the company to fund long-term growth despite product transitions.
Negative Factors
Large one-time acquisition charge
The sizable non-deductible Sidera upfront charge materially reduces reported 2026 EPS and raises the effective tax rate, while associated financing increases other expense. This weakens near-term reported profitability and can constrain capital allocation flexibility until synergies and returns from the acquisition materialize.
Read all positive and negative factors
Positive Factors
Negative Factors
High profitability and margins
Merck's very high gross and net margins indicate durable pricing power and operational efficiency across pharmaceuticals, vaccines and biologics. Strong margins support sustained R&D investment, dividends and M&A capacity, allowing the company to fund long-term growth despite product transitions.
Read all positive factors
Merck & Company (MRK) vs. SPDR S&P 500 ETF (SPY)
Market Cap
$300.20B
Dividend Yield3.12%
Average Volume (3M)9.44M
Price to Earnings (P/E)14.5
Beta (1Y)0.52
Revenue Growth1.49%
EPS Growth7.89%
CountryUS
Employees73,000
SectorHealthcare
Sector Strength45
IndustryDrug Manufacturers - General
Share Statistics
EPS (TTM)2.04
Shares Outstanding2,472,392,000
10 Day Avg. Volume7,842,051
30 Day Avg. Volume9,444,797
Financial Highlights & Ratios
PEG Ratio1.88
Price to Book (P/B)5.02
Price to Sales (P/S)4.06
P/FCF Ratio21.35
Enterprise Value/Market Cap1.11
Enterprise Value/Revenue5.12
Enterprise Value/Gross Profit6.29
Enterprise Value/Ebitda12.66
Forecast
1Y Price Target
$134.00Price Target Upside10.36% Upside
Rating ConsensusModerate Buy
Number of Analyst Covering20
EPS Forecast (FY)5.11
Revenue Forecast (FY)$66.73B
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,...
How the Company Makes Money
Merck generates revenue primarily through the sales of its pharmaceutical products, which include a wide range of prescription medications and vaccines. The company’s revenue model is largely based on the development and commercialization of new d...
Merck & Company Key Performance Indicators (KPIs)
Any
Operating Expense Breakdown
Details core costs like R&D, marketing, and admin, offering insight into how efficiently the company runs and where it’s prioritizing investment.
Details core costs like R&D, marketing, and admin, offering insight into how efficiently the company runs and where it’s prioritizing investment.
Data provided by:
The Fly
The FlyMerck & Company Earnings Call Summary
Earnings Call Date:Feb 03, 2026
(Q4-2025)
| % Change Since: |
Next Earnings Date:Apr 30, 2026
Earnings Call Sentiment Positive
The call balances near-term challenges (a sizable one-time Sidera acquisition charge, meaningful vaccine softness — notably Gardasil down 35% — RSV uptake below expectations, and an identified ~$2.5B headwind from generics and pricing reforms) against clear commercial and pipeline momentum (5% Q4 revenue growth, KEYTRUDA resilience, multiple high-growth product launches, strong specialty product performance, animal health growth, completed strategic acquisitions, and a materially expanded long‑term commercial opportunity with numerous near-term clinical readouts and regulatory milestones). While 2026 reported EPS and margins are being impacted by the acquisition charge and short-term pressures, management emphasizes durable long-term growth driven by a deep pipeline and new product launches, positioning the company for stronger growth beyond the LOE period.Positive Updates
Solid Q4 Revenue Growth
Total company revenues of $16.4 billion, up 5% year-over-year (4% ex-FX) for the quarter; non-GAAP EPS of $2.04; gross margin at 79.7% (see margin drivers below).
Negative Updates
Gardasil Revenue Decline
Gardasil sales of $1.0 billion in the quarter, down 35% year-over-year driven by materially lower demand in China and Japan (partially offset by price-driven U.S. growth of 7% and other international growth of 8%).
Read all updates
Q4-2025 Updates
Positive
Negative
Solid Q4 Revenue Growth
Total company revenues of $16.4 billion, up 5% year-over-year (4% ex-FX) for the quarter; non-GAAP EPS of $2.04; gross margin at 79.7% (see margin drivers below).
Read all positive updates
Company Guidance
Merck's 2026 non‑GAAP guidance calls for revenue of $65.5–$67.0 billion (growth of 1%–3%, including ~1 percentage‑point positive FX using mid‑January rates), an approximate gross margin of 82%, operating expenses of $35.9–$36.9 billion (which include a one‑time ~$9 billion upfront Sidera charge), other expense of ~ $1.3 billion (including financing costs for Sidera and Verona), a full‑year tax rate of 23.5%–24.5% (reflecting the non‑deductible Sidera charge), roughly 2.48 billion shares outstanding, and non‑GAAP EPS of $5.00–$5.15 (midpoint $5.08, including an estimated ~$0.10 FX benefit); excluding the ~$3.65/share Sidera upfront charge and ~$0.03/share of ongoing MK1406/transaction costs, the EPS midpoint would be ~$9.03. The company assumes about $3 billion of share repurchases, remains committed to the dividend, does not assume additional major business development in guidance, and notes an approximate $2.5 billion headwind from generics, IRA price setting and the restructured Koselugo agreement.Merck & Company Financial Statement Overview
Summary
Income Statement
78
Positive
Balance Sheet
64
Positive
Cash Flow
70
Positive
| Breakdown | Dec 2025 | Dec 2024 | Dec 2023 | Dec 2022 | Dec 2021 |
|---|---|---|---|---|---|
Income Statement | |||||
| Total Revenue | 65.01B | 64.17B | 60.12B | 59.28B | 48.70B |
| Gross Profit | 52.98B | 48.98B | 43.99B | 41.87B | 35.08B |
| EBITDA | 25.36B | 25.71B | 6.91B | 21.32B | 17.90B |
| Net Income | 18.25B | 17.12B | 365.00M | 14.52B | 13.05B |
Balance Sheet | |||||
| Total Assets | 136.87B | 117.11B | 106.67B | 109.16B | 105.69B |
| Cash, Cash Equivalents and Short-Term Investments | 14.56B | 13.69B | 7.09B | 13.19B | 8.10B |
| Total Debt | 50.53B | 38.27B | 36.27B | 31.98B | 34.63B |
| Total Liabilities | 84.20B | 70.73B | 69.04B | 63.10B | 67.44B |
| Stockholders Equity | 52.61B | 46.31B | 37.58B | 45.99B | 38.18B |
Cash Flow | |||||
| Free Cash Flow | 12.36B | 18.10B | 9.14B | 14.71B | 9.66B |
| Operating Cash Flow | 16.47B | 21.47B | 13.01B | 19.09B | 14.11B |
| Investing Cash Flow | -13.74B | -7.73B | -14.08B | -4.96B | -16.55B |
| Financing Cash Flow | -1.92B | -7.03B | -4.81B | -9.12B | 2.59B |
Merck & Company Technical Analysis
Positive
121.42
Price Trends
118.06
Positive
110.34
Positive
96.15
Positive
Market Momentum
1.46
Negative
58.41
Neutral
80.56
Negative
Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For MRK, the sentiment is Positive. The current price of 121.42 is above the 20-day moving average (MA) of 118.32, above the 50-day MA of 118.06, and above the 200-day MA of 96.15, indicating a bullish trend. The MACD of 1.46 indicates Negative momentum. The RSI at 58.41 is Neutral, neither overbought nor oversold. The STOCH value of 80.56 is Negative, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Positive sentiment for MRK.
Merck & Company Risk Analysis
Merck & Company disclosed 31 risk factors in its most recent earnings report. Merck & Company reported the most risks in the "Legal & Regulatory" category.
Finance & Corporate - Financial and accounting risks. Risks related to the execution of corporate activity and strategy
Latest Risks Added 0 New Risks
Merck & Company Peers Comparison
UnderperformOutperform
Sector (51)
Name | Overall Rating | Market Cap | P/E Ratio | ROE | Dividend Yield | Revenue Growth | EPS Growth |
|---|---|---|---|---|---|---|---|
77 Outperform | $280.58B | 19.02 | 32.80% | 2.87% | 11.53% | -15.21% | |
74 Outperform | $172.52B | 17.94 | 41.01% | 2.52% | 2.51% | 1682.88% | |
73 Outperform | £236.19B | 28.13 | 23.00% | 1.53% | 10.20% | 40.57% | |
69 Neutral | $112.83B | ― | 14.71% | 4.58% | -9.32% | 120.62% | |
68 Neutral | $300.20B | 14.46 | 36.19% | 3.12% | 1.49% | 7.89% | |
64 Neutral | $153.13B | 18.21 | 8.67% | 6.65% | -1.65% | -3.74% | |
51 Neutral | $7.86B | -0.30 | -43.30% | 2.27% | 22.53% | -2.21% |
* Healthcare Sector Average
MRK
Merck & Company
121.42
45.03
58.94%
GILD
Gilead Sciences
138.99
35.25
33.98%
NVS
Novartis
154.05
46.69
43.49%
PFE
Pfizer
26.92
6.30
30.53%
SNY
Sanofi
46.76
-3.48
-6.92%
GB:AZN
AstraZeneca
15,230.00
5,086.78
50.15%
Glossary
BuyA stock rated as a "Buy" is expected to perform better than the overall market or a specific benchmark over the near-to-medium term. This rating suggests the stock is likely to deliver higher returns compared to other stocks in the same sector or market index. Note: This is not investment advice; please consult a financial advisor before making investment decisions.
HoldA stock rated as a "Hold" is expected to perform in line with the overall market or a specific benchmark. This rating indicates that the stock is neither particularly compelling nor unfavorable for investment. Note: This is not investment advice; please consult a financial advisor before making investment decisions.
SellA stock rated as a "Sell" is expected to perform worse than the overall market or a specific benchmark over the near-to-medium term. This rating suggests the stock may deliver lower returns compared to other stocks in the same sector or market index. Note: This is not investment advice; please consult a financial advisor before making investment decisions.
Disclaimer
This AI Analyst Stock Report is automatically generated by our AI systems using advanced algorithms and publicly available financial, technical, and market data. While the information provided aims to be accurate and insightful, it is intended for informational purposes only and should not be considered financial advice. Any content created by an AI (Artificial Intelligence) system may contain inaccuracies and/or contain errors. Investing in stocks carries inherent risks, and past performance is not indicative of future results. This report does not account for your personal financial circumstances, objectives, or risk tolerance. Always conduct your own research or consult with a qualified financial advisor before making investment decisions. The analysis and recommendations provided are based on historical and current data and may not fully reflect future market conditions or unexpected developments. Neither the creators of this report nor its affiliated entities guarantee the accuracy, completeness, or reliability of the information presented. Use this report at your own discretion and risk.