QualityDipStocks / Health Care · Pharmaceuticals
Merck & Company MRK
Outside our quality screen, so we don’t track its dips. It’s 4% below its 52-week high.
Outside our quality screen, trading well above our fair value estimate.
- Fair value est.
- $103.77−31%
- Market Value
- forming
- Off 52-wk high
- −4%
- Risk vs market
- Lowbeta 0.10
3 bullish · 5 bearish See why
Key levels
Every level vs today’s $149.52
- 52-wk lowlowest close, 1 year$82.49−44.8%
- Fair value est.base case$103.77−30.6%
- PriceFri Oct 30 close$149.52you are here
- 52-wk highhighest close, 1 year$156.45+4.6%
Fair value estimate
How the range is computed
Ten-year free-cash-flow DCF. Same 10-year free-cash-flow model as the base: discount rate 9.5% ±1 point and growth 3.1% ±2 points. Bear = 10.5% and 1.1%; bull = 8.5% and 5.1% (both fade to 3%). A model estimate from public filings, not a forecast of where the price will go.
Price is above even the bull case.
What the price implies To be worth today’s price, MRK’s free cash flow would need to grow about 10% a year for five years; our estimate uses 3%.
Risk vs market
How risk vs market is measured
One year of daily returns (Oct 30 to Oct 30, 252 sessions). Beta = how much MRK moved for each 1% move in the S&P 500 (SPY); 1.0 moves with the market. Volatility is the yearly standard deviation of daily returns. Past behavior, not a forecast.
Has moved mostly independently of the market, but its own price swings are 2.3× the S&P 500’s (it moves on its own news).
- Beta vs S&P 500
- 0.10
- Volatility
- 30% vs 13% SPY
- Correlation SPY
- 0.04
- Correlation QQQ
- −0.10
Bull vs bear
Rule-based from the data on this page, strongest first. Not advice.
Top bullish points 3 of 5
Cash returnsDividend yield of 2.2% ($8.3B paid over 12 months).
ProfitabilityGross margin of 73%, above the 65% median for the 81 Health Care companies we cover.
Cash returnsShare count down 1.7% over 12 months, below the −1.0% median for the 93 Health Care companies we cover.
Top bearish points 5 of 5
ValuationOur DCF fair value estimate is $103.77, 31% below the price.
ValuationP/E of 116.4× vs a 29.2× median for the 86 Health Care companies we cover.
Balance sheetDebt rose 40% to $49.0B from FY2023 to FY2025.
Cash returnsPays out more in dividends than it earns: $8.3B paid vs $3.2B of net income.
QualityDoesn’t pass our quality screen: ROE under 12% and ROIC under 10%; net debt 7.9× EBITDA (limit 3×).
Who’s talking about it
Notable investors, executives, analysts and public figures on Merck & Company in the last 48 hours. Headlines as published, each linked. Their words, not ours.
No notable mentions in the last 48 hours. Checked Nov 1, 9:09 PM ET.
Compare with peers
Closest in size in Pharmaceuticals
All fundamentals
P/E 116.4 · FCF yield 4.3% · ROE 7%
Valuation
- P/E
- 116.4×Health Care median 29.2×
- Price / FCF
- 23.0×
- FCF yield
- 4.3%
- EV / EBITDA
- n/aD&A or debt not tagged in SEC data
- Price / sales
- 5.55×
- Price / book
- 8.81×
- Market cap
- $369Bprice × diluted shares
- Enterprise value
- $416B
Growth
- Revenue, 12 months
- $66.6B
- Sales growth, 12 months
- +4.6%vs the 12 months before
- Sales growth, 3 yrs
- +3.1%/yrfrom FY2022
- Diluted EPS, 12 months
- $1.25
- EPS growth, last FY
- +8.0%
- Net income, 12 months
- $3.2B
- Net income growth
- −81%12 months vs before
Profitability
- Gross margin
- 73.0%
- Operating margin
- n/anot reported in its SEC filings
- Net margin
- 4.8%
- FCF margin
- 24.1%
- Return on equity
- 7%
- Return on invested capital
- n/aoperating income, debt, equity or cash not tagged
Balance sheet
- Cash & short-term inv.
- $7.1B
- Total debt
- $53.9B
- Net cash
- −$46.8B
- Debt / equity
- 1.29×
- Interest coverage
- n/ainterest expense not tagged in SEC data
Cash flow & returns
- Free cash flow, 12 months
- $16.1B
- FCF growth, 12 months
- +9%
- Dividend yield
- 2.25%$8.3B paid
- Payout ratio
- 262%
- Buybacks, 12 months
- $4.2B1.1% of market cap
- Share count, 1 year
- −1.7%diluted shares vs a year ago
- Stock-based comp
- $892M
Trailing 12 months to Jun 30, 2026; balance sheet at Jun 30, 2026. From Merck & Company’s SEC filings. Sparklines show up to six fiscal years. n/a means we don’t hold that number, with the reason. How each is computed.
Valuation details
DCF $103.77 · FCF value $152.42
Assumes 3.1% growth for 5 years (revenue grew 3.1% a year FY22–FY25), fading to 3%; 9.5% discount rate, 3% terminal growth. FCF base $6.50 a share (trailing 12 months to Jun 30, 2026), from the 10-Q filed Aug 7, 2026. Net debt $43.9B, not deducted.
Setup & signals
No setup armed
No setup armed, so there’s no trigger or stop to track yet. Reversal signal rules only run on companies that pass our quality screen.
Momentum & 52-week range
RSI 57 · 5 days +2.9%
The business
FCF $14.7B · Sales +5%
- Free cash flow, 12 months$14.7B
- Free-cash-flow yield4.1%
- Free-cash-flow margin22%
- Gross margin72%
- Operating margin9%
- Return on invested capital5%
- Return on equity5%
- Sales growth (latest quarter vs year-ago quarter)+5%
- Net debt / EBITDA7.9×
Information only, not investment advice. Fair value estimates and talking points are rule-based model output from public data and can be wrong; stop levels are reference points, not orders. How every number is computed.
MRK is outside our quality screen
One text when a published rule fires on one of the 333 quality companies we track: the ticker, the price, the stop and a link to the numbers. Nothing else.