Merck & Company (MRK) AI Stock Analysis

• Market Cap: $212.14B
• Dividend Yield: 3.78%
• Average Volume (3M): 11.62M
• Price to Earnings (P/E): 13.1
• Beta (1Y): 0.44
• Revenue Growth: 2.00%
• EPS Growth: 20.01%
• Country: US
• Employees: 73,000
• Sector: Healthcare
• Sector Strength: 53
• Industry: Drug Manufacturers - General
• EPS (TTM): 2.13
• Shares Outstanding: 2,497,783,200
• 10 Day Avg. Volume: 9,700,958
• 30 Day Avg. Volume: 11,621,934
• PEG Ratio: N/A
• Price to Book (P/B): 0.00
• Price to Sales (P/S): 0.00
• P/FCF Ratio: 0.00
• Enterprise Value/Market Cap: 1.06
• Enterprise Value/Revenue: 3.53
• Enterprise Value/Gross Profit: 4.62
• Enterprise Value/Ebitda: 8.66
• 1Y Price Target: $101.93
• Price Target Upside: 18.41% Upside
• Rating Consensus: Moderate Buy
• Number of Analyst Covering: 16

• Rating: 81 Outperform
• Price Target: $96.00 ▲(11.52% Upside)

Merck's strong financial performance and attractive valuation are the primary drivers of its stock score. The company's robust profitability and efficient cost management are complemented by a favorable P/E ratio and dividend yield. However, challenges such as declining GARDASIL sales and potential future revenue and asset base declines temper the overall outlook. Technical indicators suggest a neutral trend, while the earnings call highlights both growth opportunities and significant challenges.

Positive Factors

Business Strategy

The newly announced $3bn optimization initiative is viewed as a sensible re-allocation of capital to fund new launches and R&D.

Product Performance

Performance from the company’s key new product cycle, Winrevair, remains intact with optimism on potential label expansion and data from the HYPERION trial.

Negative Factors

Gardasil Franchise

Continued softness and uncertainty around when the Gardasil franchise will find its footing drives investor concerns.

Regulatory Risk

Potential macroeconomic discussions are anticipated regarding new EU tariffs and shifts in Medicare pricing.

Merck & Company Business Overview & Revenue Model

Company Description

Merck & Company, known as Merck Sharp & Dohme (MSD) outside the United States and Canada, is a leading global healthcare company dedicated to discovering, developing, and providing innovative medicines, vaccines, and animal health products. Founded in 1891, Merck operates in two primary sectors: Human Health, which includes prescription medicines, vaccines, biologics, and over-the-counter products, and Animal Health, which offers a range of products for livestock and companion animals. The company is renowned for its contributions to medical science, including advancements in oncology, infectious diseases, and vaccines.

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 displays strong profitability and cash generation with robust margins and a stable balance sheet. However, recent declines in revenue and asset base suggest potential challenges ahead.

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: Positive
• Last Price: 86.08
• 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 Positive. The current price of 86.08 is above the 20-day moving average (MA) of 82.08, above the 50-day MA of 81.49, and below the 200-day MA of 87.22, indicating a neutral trend. The MACD of 0.99 indicates Negative momentum. The RSI at 65.24 is Neutral, neither overbought nor oversold. The STOCH value of 82.56 is Negative, 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
PFE	82 Outperform	$143.96B	13.46	12.16%	6.74%	14.72%	―
MRK	81 Outperform	$212.14B	13.09	35.44%	3.78%	2.00%	20.01%
AZN	79 Outperform	$245.82B	29.63	19.76%	1.94%	15.08%	29.15%
NVS	78 Outperform	$238.56B	17.97	32.82%	3.14%	12.83%	-11.92%
SNY	76 Outperform	$122.81B	12.48	8.39%	4.38%	-9.32%	120.62%
AMGN	67 Neutral	$159.11B	24.18	99.14%	3.12%	13.10%	110.67%
Sector *	51 Neutral	$7.77B	-0.12	-39.78%	2.21%	22.68%	-1.42%

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.