Merck & Company (MRK) AI Stock Analysis

• Market Cap: $203.22B
• Dividend Yield: 4%
• Average Volume (3M): 16.02M
• Price to Earnings (P/E): 11.8
• Beta (1Y): 0.39
• Revenue Growth: 4.40%
• EPS Growth: 654.93%
• Country: US
• Employees: 73,000
• Sector: Healthcare
• Sector Strength: 39
• Industry: Drug Manufacturers - General
• EPS (TTM): 2.22
• Shares Outstanding: 2,511,031,300
• 10 Day Avg. Volume: 21,466,286
• 30 Day Avg. Volume: 16,024,929
• PEG Ratio: 5.95
• Price to Book (P/B): 4.14
• Price to Sales (P/S): 0.00
• P/FCF Ratio: 11.65
• Enterprise Value/Market Cap: 1.11
• Enterprise Value/Revenue: 0.89
• Enterprise Value/Gross Profit: 4.34
• Enterprise Value/Ebitda: 2.38
• 1Y Price Target: $103.25
• Price Target Upside: 27.63% Upside
• Rating Consensus: Moderate Buy
• Number of Analyst Covering: 17

• Rating: 79 Outperform
• Price Target: $94.00 ▲(16.19%Upside)

Merck & Company's stock score is driven by strong financial performance and attractive valuation metrics. The positive outlook from their earnings call and technical indicators suggest potential growth, although there are challenges such as declining sales in China and tariff impacts. The company's strategic focus on high-growth areas and a robust pipeline supports its long-term potential.

Positive Factors

Clinical Trials

MRK announced positive topline results from two Ph3 clinical trials, evaluating enlicitide decanoate for the treatment of adults with hyperlipidemia.

Financial Performance

The company's strong cash flow generation and margin expansion opportunities contribute to a growth profile at the high end of peers.

Product Development

Keytruda represents the key pillar of growth for the company, driving upside to both top line and operating margins/earnings.

Negative Factors

Investor Sentiment

Potential negative ACIP-related outcomes, particularly for Gardasil, could further dent investor sentiment.

Sales Performance

Lower Gardasil sales, particularly in China and Japan, are expected to offset growth elsewhere in the portfolio.

Vaccine Policy

Vaccine policy-related uncertainty is persisting ahead of the next ACIP meeting, affecting investor focus on MRK.

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 displays a robust financial position with strong profitability, efficient cost management, and solid cash generation. The balance sheet is stable with manageable leverage. However, recent declines in revenue and asset base could pose future challenges if trends continue, suggesting a need for strategic initiatives to sustain growth and asset utilization.

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	TTM	Dec 2024	Dec 2023	Dec 2022	Dec 2021	Dec 2020
Income Statement
Total Revenue	63.92B	64.17B	60.12B	59.28B	48.70B	41.52B
Gross Profit	51.75B	48.98B	43.99B	41.87B	35.08B	27.90B
EBITDA	27.30B	26.94B	6.91B	21.32B	17.90B	10.18B
Net Income	17.43B	17.12B	365.00M	14.52B	13.05B	7.07B
Balance Sheet
Total Assets	115.12B	117.11B	106.67B	109.16B	105.69B	91.59B
Cash, Cash Equivalents and Short-Term Investments	9.23B	13.69B	7.09B	13.19B	8.10B	8.06B
Total Debt	34.84B	37.11B	36.27B	30.69B	33.10B	31.79B
Total Liabilities	66.72B	70.73B	69.04B	63.10B	67.44B	66.18B
Stockholders Equity	48.34B	46.31B	37.58B	45.99B	38.18B	25.32B
Cash Flow
Free Cash Flow	17.04B	18.10B	9.14B	14.71B	9.66B	5.57B
Operating Cash Flow	20.88B	21.47B	13.01B	19.09B	14.11B	10.25B
Investing Cash Flow	-7.84B	-7.73B	-14.08B	-4.96B	-16.55B	-9.44B
Financing Cash Flow	-9.97B	-7.03B	-4.81B	-9.12B	2.59B	-2.83B

Merck & Company Technical Analysis

• Technical Analysis Sentiment: Positive
• Last Price: 80.90
• 50DMA: Positive
• 100DMA: Negative
• 200DMA: Negative
• MACD: Negative
• RSI: Neutral
• STOCH: Neutral

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 80.9 is above the 20-day moving average (MA) of 79.98, above the 50-day MA of 78.76, and below the 200-day MA of 91.41, indicating a neutral trend. The MACD of 0.71 indicates Negative momentum. The RSI at 55.51 is Neutral, neither overbought nor oversold. The STOCH value of 66.30 is Neutral, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Positive sentiment for MRK.

Merck & Company Peers Comparison

Name	Overall Rating	Market Cap	P/E Ratio	ROE	Dividend Yield	Revenue Growth	EPS Growth
MRK	79 Outperform	$203.22B	11.78	39.31%	4.00%	4.40%	654.93%
NVS	78 Outperform	$235.18B	18.95	32.95%	3.28%	6.30%	-13.28%
AZN	74 Outperform	$215.87B	27.77	19.81%	3.02%	15.48%	22.70%
AMGN	73 Outperform	$160.37B	27.22	105.67%	3.19%	15.59%	56.99%
SNY	70 Outperform	$119.59B	20.10	7.34%	4.58%	-4.57%	2.96%
PFE	67 Neutral	$144.29B	18.39	8.62%	6.78%	13.38%	―
Sector *	55 Neutral	€4.60B	16.78	-49.49%	1.93%	15.33%	-9.51%

Merck & Company Corporate Events

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.