tiprankstipranks
Trending News
More News >
Merck & Company (MRK)
NYSE:MRK
Advertisement

Merck & Company (MRK) AI Stock Analysis

Compare
13,911 Followers

Top Page

MRK

Merck & Company

(NYSE:MRK)

Rating:80Outperform
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 (MRK) vs. SPDR S&P 500 ETF (SPY)

Merck & Company Business Overview & Revenue Model

Company DescriptionMerck & 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 MoneyMerck & 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 Key Performance Indicators (KPIs)

Any
Any
Operating Expense Breakdown
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.
Chart InsightsMerck's operating expenses reveal strategic shifts, with R&D costs showing significant volatility, notably spiking in mid-2023, reflecting heavy investment in their innovative pipeline. The earnings call highlights robust revenue growth driven by oncology and animal health, despite challenges with GARDASIL in China. This suggests a strategic pivot towards high-growth areas like oncology, supported by strong financial performance, while managing short-term headwinds in other segments. Investors should note the company's confidence in long-term growth, underpinned by a strong pipeline and strategic focus on high-demand sectors.
Data provided by:Main Street Data

Merck & Company Earnings Call Summary

Earnings Call Date:Jul 29, 2025
(Q2-2025)
|
% Change Since: 7.82%|
Next Earnings Date:Oct 30, 2025
Earnings Call Sentiment Neutral
Merck's earnings call highlights steady performance in oncology and Animal Health, successful product launches, and a robust pipeline. However, significant declines in GARDASIL sales, particularly in China, and the impact of foreign exchange and tariffs present challenges.
Q2-2025 Updates
Positive Updates
Steady Revenue and Growth in Core Areas
Merck delivered revenue of $15.8 billion in Q2 2025, reflecting strength in oncology and Animal Health as well as contributions from new product launches like WINREVAIR, which achieved $1 billion in cumulative sales.
Successful Product Launches and Pipeline Expansion
The company highlighted successful launches of WINREVAIR and CAPVAXIVE, and positive clinical trial results for enlicitide and other pipeline candidates. Over 80 Phase III studies are underway.
Strong Performance in Oncology
KEYTRUDA sales increased 9% to $8 billion, with growth in both U.S. and international markets, driven by robust demand from metastatic indications and increased uptake in earlier-stage cancers.
Animal Health Growth
Animal Health sales increased 11%, reflecting higher demand across all species and improved supply.
Negative Updates
Decline in GARDASIL Sales
GARDASIL sales were $1.1 billion, a decrease of 55%, driven primarily by declining sales in China. Excluding China, sales still declined 4% due to factors in Japan and international markets.
Impact of Foreign Exchange and Tariffs
Total company revenues decreased 2%, affected by foreign exchange. Guidance includes $200 million of costs related to tariffs, with potential government actions pending.
Challenges in China
Sales of GARDASIL in China fell by approximately $1.3 billion, reducing overall growth by 9 percentage points. The company will not resume shipments to China through at least the end of this year.
Company Guidance
During the Merck & Co., Inc. Q2 2025 earnings call, the company reported revenues of $15.8 billion, reflecting a 2% decrease year-over-year, both nominally and excluding foreign exchange impacts. Notably, sales were impacted by a $1.3 billion decline in GARDASIL sales in China, which reduced growth by 9 percentage points. Excluding these sales, global growth was 7%, driven by oncology and Animal Health, as well as new products like WINREVAIR, which achieved $1 billion in cumulative sales since approval. Sales of KEYTRUDA rose 9% to $8 billion, and WINREVAIR contributed $336 million in global sales. Operating expenses increased to $6.6 billion, with a gross margin of 82.2%. The company announced a multiyear optimization program to redirect $3 billion in cost savings from lower-growth areas into high-potential areas. Full-year 2025 guidance includes revenue expectations of $64.3 billion to $65.3 billion, with EPS projected between $8.87 and $8.97.

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
85
Very Positive
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
78
Positive
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
82
Very Positive
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.
BreakdownDec 2024Dec 2023Dec 2022Dec 2021Dec 2020
Income Statement
Total Revenue64.17B60.12B59.28B48.70B41.52B
Gross Profit48.98B43.99B41.87B35.08B27.90B
EBITDA25.71B6.91B21.32B17.90B10.18B
Net Income17.12B365.00M14.52B13.05B7.07B
Balance Sheet
Total Assets117.11B106.67B109.16B105.69B91.59B
Cash, Cash Equivalents and Short-Term Investments13.69B7.09B13.19B8.10B8.05B
Total Debt37.11B35.05B30.69B33.10B31.79B
Total Liabilities70.73B69.04B63.10B67.44B66.18B
Stockholders Equity46.31B37.58B45.99B38.18B25.32B
Cash Flow
Free Cash Flow18.10B9.14B14.71B9.66B5.57B
Operating Cash Flow21.47B13.01B19.09B14.11B10.25B
Investing Cash Flow-7.73B-14.08B-4.96B-16.55B-9.44B
Financing Cash Flow-7.03B-4.81B-9.12B2.59B-2.83B

Merck & Company Technical Analysis

Technical Analysis Sentiment
Negative
Last Price84.06
Price Trends
50DMA
79.82
Positive
100DMA
81.81
Positive
200DMA
89.15
Negative
Market Momentum
MACD
0.91
Negative
RSI
53.15
Neutral
STOCH
81.04
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 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

Overall Rating
UnderperformOutperform
Sector (46)
Financial Indicators
Name
Overall Rating
Market Cap
P/E Ratio
ROE
Dividend Yield
Revenue Growth
EPS Growth
80
Outperform
$211.08B12.2439.31%3.81%4.40%654.93%
78
Outperform
$221.18B16.7132.82%3.44%12.83%-11.92%
78
Outperform
$223.38B28.6519.81%2.14%15.48%22.70%
74
Outperform
$121.08B20.597.34%0.09%-4.57%2.96%
73
Outperform
$162.01B27.50105.67%3.07%15.59%56.99%
66
Neutral
$140.94B17.978.62%7.03%13.38%
46
Neutral
C$205.70M-3.34-23.14%2.45%20.79%-0.36%
* Healthcare Sector Average
Performance Comparison
Ticker
Company Name
Price
Change
% Change
MRK
Merck & Company
84.06
-27.42
-24.60%
AMGN
Amgen
301.29
-21.57
-6.68%
AZN
AstraZeneca
73.98
-2.38
-3.12%
NVS
Novartis
116.18
7.54
6.94%
PFE
Pfizer
24.31
-5.02
-17.12%
SNY
Sanofi
49.35
-0.74
-1.48%

Merck & Company Corporate Events

M&A TransactionsBusiness Operations and StrategyFinancial Disclosures
Merck & Co. Announces New Restructuring Program
Neutral
Jul 29, 2025

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.

Executive/Board ChangesShareholder Meetings
Merck & Co. Concludes Annual Shareholders Meeting
Neutral
May 29, 2025

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.

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.Date of analysis: Jul 23, 2025