Merck & Company (MRK) AI Stock Analysis

• Market Cap: $260.71B
• Dividend Yield: 3.12%
• Average Volume (3M): 16.27M
• Price to Earnings (P/E): 13.9
• Beta (1Y): 0.52
• Revenue Growth: 1.59%
• EPS Growth: 58.02%
• Country: US
• Employees: 73,000
• Sector: Healthcare
• Sector Strength: 45
• Industry: Drug Manufacturers - General
• EPS (TTM): 2.58
• Shares Outstanding: 2,482,022,500
• 10 Day Avg. Volume: 18,099,036
• 30 Day Avg. Volume: 16,272,841
• PEG Ratio: <0.01
• Price to Book (P/B): 5.44
• Price to Sales (P/S): 3.93
• P/FCF Ratio: 13.92
• Enterprise Value/Market Cap: 0.89
• Enterprise Value/Revenue: 3.62
• Enterprise Value/Gross Profit: 4.63
• Enterprise Value/Ebitda: 8.45
• 1Y Price Target: $116.38
• Price Target Upside: 10.80% Upside
• Rating Consensus: Moderate Buy
• Number of Analyst Covering: 14
• EPS Forecast (FY): N/A
• Revenue Forecast (FY): N/A

• Rating: 80 Outperform
• Price Target: $114.00 ▲(8.53% Upside)

Merck & Company receives a strong overall stock score due to its robust financial performance, attractive valuation, and positive earnings call outlook. The company's strategic financial maneuvers and pipeline advancements further enhance its growth potential. However, attention should be paid to increasing debt levels and challenges in certain product segments.

Positive Factors

Pipeline Advancements

Merck's robust pipeline with numerous Phase III trials indicates strong future growth potential and innovation in key therapeutic areas.

FDA Approval Process

The streamlined FDA approval process could accelerate Merck's time-to-market for new drugs, enhancing competitive advantage and revenue growth.

Strategic Financial Moves

The $7 billion notes offering strengthens Merck's financial position, providing capital for growth initiatives and enhancing market stability.

Negative Factors

Patent Litigation

Patent litigation in Germany could hinder Merck's ability to market Keytruda SC, impacting revenue and market expansion in Europe.

Debt Levels

Increasing debt levels could strain Merck's financial flexibility, potentially impacting future investments and operational stability.

Decline in GARDASIL Sales

The decline in GARDASIL sales highlights challenges in key markets, which could affect Merck's revenue and market share in the vaccine segment.

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 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 drugs, which often involve extensive research and development (R&D) investments. Key revenue streams include the sales of its flagship products, vaccines, and biologics. Additionally, Merck engages in strategic partnerships and collaborations with other pharmaceutical companies, research institutions, and government entities to enhance its R&D capabilities and accelerate product development. These partnerships may contribute to revenue through shared development costs and milestone payments. Furthermore, Merck benefits from a strong patent portfolio, which provides exclusivity for its products and helps maximize profit margins during the patent protection period. Overall, the company’s ability to innovate and bring new therapies to market, coupled with its established brand reputation, plays a crucial role in sustaining its earnings.

Merck & Company Financial Statement Overview

Summary

Merck & Company demonstrates strong financial performance with impressive revenue growth and profitability. The balance sheet is stable, though increasing debt levels warrant attention. Cash flow management is generally strong, but recent declines in free cash flow growth should be monitored.

Income Statement

Merck & Company shows strong profitability with a TTM gross profit margin of 78.3% and a net profit margin of 29.6%. The EBIT margin is robust at 35.4%, indicating efficient operations. Revenue growth is impressive at 97.3% TTM, showcasing significant expansion. Overall, the income statement reflects strong growth and profitability, although the high growth rate may not be sustainable long-term.

Balance Sheet

The company's debt-to-equity ratio is 0.80, indicating a moderate level of leverage. Return on equity is strong at 38.9%, demonstrating effective use of shareholder funds. The equity ratio is healthy, suggesting a stable financial position. However, the increase in total debt over the years could pose a risk if not managed carefully.

Cash Flow

Operating cash flow to net income ratio is 0.60, indicating good cash generation relative to earnings. Free cash flow to net income ratio is 0.76, showing solid cash flow management. However, the free cash flow growth rate is negative at -11.4% TTM, which could be a concern if it continues. Overall, cash flow management is solid but shows some areas for improvement.

Breakdown	TTM	Dec 2024	Dec 2023	Dec 2022	Dec 2021	Dec 2020
Income Statement
Total Revenue	64.23B	64.17B	60.12B	59.28B	48.70B	41.52B
Gross Profit	50.31B	48.98B	43.99B	41.87B	35.08B	27.90B
EBITDA	27.57B	25.71B	6.91B	21.32B	17.90B	10.18B
Net Income	19.03B	17.12B	365.00M	14.52B	13.05B	7.07B
Balance Sheet
Total Assets	129.55B	117.11B	106.67B	109.16B	105.69B	91.59B
Cash, Cash Equivalents and Short-Term Investments	18.21B	13.69B	7.09B	13.19B	8.10B	8.05B
Total Debt	41.37B	38.27B	36.27B	31.98B	34.63B	33.42B
Total Liabilities	77.64B	70.73B	69.04B	63.10B	67.44B	66.18B
Stockholders Equity	51.85B	46.31B	37.58B	45.99B	38.18B	25.32B
Cash Flow
Free Cash Flow	13.05B	18.10B	9.14B	14.71B	9.66B	5.57B
Operating Cash Flow	17.07B	21.47B	13.01B	19.09B	14.11B	10.25B
Investing Cash Flow	-3.98B	-7.73B	-14.08B	-4.96B	-16.55B	-9.44B
Financing Cash Flow	-9.68B	-7.03B	-4.81B	-9.12B	2.59B	-2.83B

Merck & Company Technical Analysis

• Technical Analysis Sentiment: Positive
• Last Price: 105.04
• 50DMA: Positive
• 100DMA: Positive
• 200DMA: Positive
• 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 105.04 is above the 20-day moving average (MA) of 100.58, above the 50-day MA of 93.04, and above the 200-day MA of 83.81, indicating a bullish trend. The MACD of 2.53 indicates Negative momentum. The RSI at 68.97 is Neutral, neither overbought nor oversold. The STOCH value of 91.74 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
MRK	80 Outperform	$260.71B	13.89	39.51%	3.12%	1.59%	58.02%
NVS	80 Outperform	$265.73B	18.84	32.93%	2.87%	11.53%	-15.21%
AZN	79 Outperform	$287.39B	30.36	21.73%	1.70%	12.95%	44.28%
GILD	78 Outperform	$155.32B	19.39	40.53%	2.52%	2.76%	6407.19%
SNY	75 Outperform	$117.26B	12.01	8.39%	4.58%	-9.32%	120.62%
PFE	74 Outperform	$141.46B	14.50	10.59%	6.65%	4.44%	128.96%
Sector *	51 Neutral	$7.86B	-0.30	-43.30%	2.27%	22.53%	-2.21%

Merck & Company Corporate Events

Merck & Co. Closes $7 Billion Notes Offering

On December 4, 2025, Merck & Co., Inc. completed a significant financial maneuver by closing an underwritten public offering of various notes totaling $7 billion. This strategic move is expected to bolster the company’s financial position and provide capital for future growth initiatives, potentially impacting its market standing and stakeholder interests.

Merck & Co. Closes $6 Billion Notes Offering

On September 9, 2025, Merck & Co., Inc. successfully closed a significant public offering of various notes totaling $6 billion, with maturities ranging from 2027 to 2055. This strategic financial move is expected to strengthen the company’s capital structure and support its ongoing operations and growth initiatives.