Upside case
Bull case
$137+20.4%
MRK would need investors to value it at roughly 27x earnings — about 5x more generous than today's 22x forward P/E. That requires meaningful multiple expansion on top of continued earnings growth.
Analysis OverviewBuyUpdated May 1, 2026
Merck & Co., Inc. (MRK) Stock Analysis
Wall Street verdict, consensus price target, and analyst rating breakdown — everything needed to frame the risk/reward at today's price.
Analyst consensus
Buy
Covering
37
analysts
25 bullish · 1 bearish · 37 covering MRK
Strong Buy
0
Buy
25
Hold
11
Sell
1
Strong Sell
0
Consensus Target
$129
+13.9% vs today
Scenario Range
$22 – $137
Model bear to bull value window
Coverage
37
Published analyst ratings
Valuation Context
22.2x
Forward P/E · Market cap $280.5B
MRK price targets
Three scenarios for where MRK stock could go
Current
~$114
Confidence
56 / 100
Updated
May 1, 2026
Where we are now
Current · $114
Bear
$22
Base
$134
Bull
$137
Market caseClosest to today
Base case
$134+17.9%
At 26x on FY1 earnings, the base case reflects a reasonable but not stretched valuation. It prices in continued growth without assuming an exceptional setup.
Stress case
Bear case
$22-80.5%
If investor confidence fades or macro conditions deteriorate, a 18x multiple contraction could push MRK down roughly 81% from where it trades now.
Not financial advice. Model confidence reflects internal scenario assumptions, not a guarantee of returns. Past performance does not predict future results.
Merck & Co., Inc.
MRK · NYSEHealthcareDrug Manufacturers - GeneralDecember year-end
Merck & Co. is a global pharmaceutical company that develops and markets prescription medicines, vaccines, and animal health products. It generates revenue primarily from its Pharmaceutical segment — including blockbuster cancer drug Keytruda — which accounts for roughly 90% of sales, with the remaining 10% coming from Animal Health products. The company's key competitive advantage lies in its deep oncology franchise, particularly Keytruda's dominant position in immuno-oncology, supported by extensive clinical data and patent protection.
Market Cap
$280.5B
Revenue TTM
$64.9B
Net Income TTM
$18.3B
Net Margin
28.1%
MRK Revenue and Earnings Performance
Quarterly beat-or-miss track record against analyst estimates, plus forward revenue and EPS outlook for the next two fiscal years.
EPS Beat Rate
92%Exceptional
12 quarters tracked
Revenue Beat Rate
92%Exceptional
vs consensus estimates
Avg EPS Surprise
+16.2%
above Street consensus
Beat / Miss Record
BeatMissLeft = EPS · Right = Revenue
Q3 2025
Q4 2025
Q1 2026
Q2 2026
Last 4 Quarters
EPS beats: 4 of 4Q3 2025
EPS
$2.13/$2.03
Revenue
$15.8B/$15.9B
Q4 2025
EPS
$2.58/$2.36
Revenue
$17.3B/$17.0B
Q1 2026
EPS
$2.04/$2.01
Revenue
$16.4B/$16.2B
Q2 2026
EPS
$-1.28/$-1.47
Revenue
$16.3B/$15.8B
| Quarter | EPS (Actual / Est) | EPS Surprise | Revenue (Actual / Est) | Rev Surprise |
|---|---|---|---|---|
| Q3 2025 | $2.13/$2.03 | +4.9% | $15.8B/$15.9B | -0.4% |
| Q4 2025 | $2.58/$2.36 | +9.3% | $17.3B/$17.0B | +1.8% |
| Q1 2026 | $2.04/$2.01 | +1.5% | $16.4B/$16.2B | +1.2% |
| Q2 2026 | $-1.28/$-1.47 | +12.9% | $16.3B/$15.8B | +2.8% |
FY1–FY2 Estimates
Revenue Outlook
FY1
$66.9B
+3.0% YoY
FY2
$69.6B
+4.1% YoY
EPS Outlook
FY1
$6.48
-11.7% YoY
FY2
$8.58
+32.6% YoY
Trailing FCF (TTM)$12.4B
FCF Margin: 19.0%
Next Earnings
—
Expected EPS
—
Expected Revenue
—
MRK beat EPS estimates in 4 of 4 tracked quarters. A perfect track record raises the bar for the upcoming report.
MRK Revenue Breakdown by Segment
Product and geographic revenue mix from the latest annual disclosure, with year-over-year growth by segment.
Latest disclosure
FY 2025
Total disclosed revenue $65.0B
Product Mix
Latest annual revenue by segment or product family
Pharmaceutical segment
89.4%
+1.3% YoY
Tap, hover, or focus a slice to inspect segment detail.
Geographic Mix
Latest annual revenue by reported region
UNITED STATES
56.2%
+13.1% YoY
Tap, hover, or focus a slice to inspect segment detail.
Pharmaceutical segment is the largest disclosed segment at 89.4% of FY 2025 revenue, up 1.3% YoY.
UNITED STATES is the largest reported region at 56.2%, up 13.1% YoY.
MRK Valuation Snapshot
Current multiples compared to the S&P 500, the company's sector, and its own five-year average.
Relative Value Signal
Significantly Undervalued
Fair value est. $193 — implies +71.8% from today's price.
Upside to Fair Value
71.8%
potential upside
Deep DiscountFair ValueVery Expensive
vs S&P 500 Trailing P/E
MRK
15.6x
vs
S&P 500
25.2x
38% discount
vs Healthcare Trailing P/E
MRK
15.6x
vs
Healthcare
22.1x
30% discount
vs MRK 5Y Avg P/E
Today
15.6x
vs
5Y Average
15.9x
In line with benchmark
Forward PE
22.2x
S&P 500
19.1x
+16%
Healthcare
19.0x
+16%
5Y Avg
—
—
Trailing PE
15.6x
S&P 500
25.2x
-38%
Healthcare
22.1x
-30%
5Y Avg
15.9x
-2%
PEG Ratio
0.73x
S&P 500
1.75x
-58%
Healthcare
1.52x
-52%
5Y Avg
—
—
EV/EBITDA
10.8x
S&P 500
15.3x
-29%
Healthcare
14.1x
-24%
5Y Avg
18.7x
-42%
Price/FCF
22.7x
S&P 500
21.3x
+6%
Healthcare
18.7x
+22%
5Y Avg
21.0x
+8%
Price/Sales
4.3x
S&P 500
3.1x
+38%
Healthcare
2.8x
+52%
5Y Avg
4.3x
+1%
Dividend Yield
2.87%
S&P 500
1.88%
+53%
Healthcare
1.40%
+105%
5Y Avg
2.95%
-3%
| Metric | MRK | S&P 500 | Healthcare | 5Y Avg MRK |
|---|---|---|---|---|
| Forward PE | 22.2x | 19.1x+16% | 19.0x+16% | — |
| Trailing PE | 15.6x | 25.2x-38% | 22.1x-30% | 15.9x |
| PEG Ratio | 0.73x | 1.75x-58% | 1.52x-52% | — |
| EV/EBITDA | 10.8x | 15.3x-29% | 14.1x-24% | 18.7x-42% |
| Price/FCF | 22.7x | 21.3x | 18.7x+22% | 21.0x |
| Price/Sales | 4.3x | 3.1x+38% | 2.8x+52% | 4.3x |
| Dividend Yield | 2.87% | 1.88% | 1.40% | 2.95% |
MRK trades above S&P 500 benchmarks on 2 of 6 measured multiples — is elevated on some multiples, but competitive on others — a mixed valuation picture.
Forward P/E and PEG reflect analyst consensus estimates. Historical averages use trailing ratios where forward data is unavailable.S&P 500 and sector benchmarks both use trailing median P/E — similar readings indicate the broader index and sector are priced alike.
Open valuation toolMRK Financial Health
Verdict
Exceptional
MRK generates $12.4B in free cash flow at a 19.0% margin — 22.0% ROIC signals a durable competitive advantage · returns 4.7% of market cap to shareholders annually.
Cash Engine
Revenue, margins, and cash generation
Revenue (TTM)
Trailing-twelve-month sales base
$64.9B
Revenue Growth
TTM vs prior year
+1.2%
Gross Margin
Gross profit as a share of revenue
74.2%
Operating Margin
Operating income divided by revenue
41.1%
Net Margin
Net income divided by revenue
28.1%
EPS (TTM)
Diluted earnings per share, trailing twelve months
$7.34
Free Cash Flow (TTM)
Cash generation after capex
$12.4B
FCF Margin
FCF as share of revenue — the primary cash quality signal
19.0%
Capital Quality
ROIC, leverage, and debt serviceability
ROIC
Return on invested capital — primary competitive quality signal
22.0%
ROA
Return on assets, trailing twelve months
14.6%
Cash & Equivalents
Liquid assets on the balance sheet
$14.6B
Net Debt
Total debt minus cash
$36.0B
Debt Serviceability
Net debt as a multiple of annual free cash flow
2.9× FCF
~2.9 years to full repayment at current FCF run-rate
ROE
Return on equity, trailing twelve months
36.1%
Shareholder Returns
How capital is returned to owners
Total shareholder yield
4.7%
Dividend
2.9%
Buyback
1.8%
Share Repurchases
Trailing buyback outflow — dollar magnitude of capital returned
$5.1B
Dividend / Share
Annualized trailing dividend per share
$3.26
Payout Ratio
Share of earnings distributed as dividends
44.8%
Shares Outstanding
Declining as buybacks retire shares
2.5B
All figures from the trailing twelve months. ROIC uses invested capital (equity + net debt).
Open full ratios pageMRK Stock Risk Factors
Key factors that could pressure the stock price, compress the multiple, or weigh on future results.
AI analysis · updated April 11, 2026
High Risk
Keytruda Exclusivity & Biosimilar Threat
Merck’s flagship oncology drug Keytruda is set to lose market exclusivity between 2028 and 2029, opening the door to biosimilar competition that is expected to materially reduce sales. The loss of Keytruda’s exclusivity represents a significant revenue risk, as it is a major driver of the company’s top line.
Medium
Regulatory & Litigation Risk
Delays or rejections in FDA approvals for new products can negatively impact investor confidence and sales. Merck is also exposed to litigation, including patent disputes, which could result in financial penalties or loss of market share.
Medium
Patent Cliff & Pipeline Uncertainty
Beyond Keytruda, Merck faces a broader patent cliff later in the decade, adding uncertainty to long‑term growth. Success depends on developing new indications, next‑generation oncology drugs, or strategic acquisitions, with clinical trial failures posing a substantial risk.
Medium
Manufacturing Challenges
Production difficulties or delays can disrupt supply chains, potentially impacting revenue and margins. Manufacturing issues may also affect the timely launch of new products.
Lower
Debt Structure & Financing
Merck has increased its net financial debt through acquisitions, and its debt is unsecured and potentially junior to secured debt, which could limit financial flexibility and increase borrowing costs.
Lower
ESG Cost Impact
Rising development and production costs related to environmental, social, and governance (ESG) concerns may squeeze profit margins, affecting overall profitability.
These are risk mechanisms, not predictions. The key question is which would force a cut to earnings estimates or a lower multiple than the market currently prices in.
Why MRK Stock Could Outperform
Structural drivers behind the upside case and why the stock could outperform over the next 12 months.
AI analysis · updated April 11, 2026
Pipeline and Future Growth
Merck’s pipeline is deep, with numerous Phase III trials and new growth pillars such as Winrevair and Ohtuvayre. The company projects a non‑risk‑adjusted commercial opportunity of over $70 billion for its current pipeline by the mid‑2030s, more than double the peak sales estimate for Keytruda.
Financial Performance
In Q3, Merck delivered non‑GAAP EPS of $2.58 on revenue of $17.3 billion, driven by Keytruda, Gardasil and disciplined cost controls. The company’s margin expansion and revenue growth underscore its robust financial health.
Dividend Yield and Shareholder Returns
Merck offers a dividend yield of over 3.3% and has increased its dividend for 14 consecutive years, providing a steady income stream to shareholders.
Strategic Acquisitions and Portfolio Renewal
Merck is actively pursuing acquisitions to accelerate portfolio renewal, positioning the company to replace Keytruda’s revenue as patents expire and sustain long‑term growth.
A real bull case compounds — each driver matters most when it strengthens margins, supports capital returns, and keeps the company above the market's minimum growth bar simultaneously.
MRK Stock Price Performance
52-week range context and price returns across multiple time horizons. Dividend contribution is shown separately in the Capital Return section.
Current Price
$113.56
52W Range Position
78%
52-Week Range
Current price plotted between the 52-week low and high.
52-Week Low
$73.31
+54.9% from the low
52-Week High
$125.14
-9.3% from the high
1 Month
-6.06%
3 Month
-6.86%
YTD
+6.7%
1 Year
+43.7%
3Y CAGR
-1.4%
5Y CAGR
+8.9%
10Y CAGR
+8.3%
Range context matters because valuation compression and earnings misses rarely hit from the same starting point. A stock already far below its high can still fall, but it is no longer carrying the same embedded optimism as one pressing a fresh peak.
MRK vs Peers
Valuation, growth, and margin comparison against the closest publicly traded peers for this company.
Peer Set
Accurate peer set
Forward PE
22.2x
vs 14.4x median
+54% above peer median
Revenue Growth
+3.0%
vs +4.5% median
-32% below peer median
Net Margin
28.1%
vs 15.0% median
+87% above peer median
| Company | Mkt Cap | Fwd PE | Rev Grw | Margin | Rating | Upside |
|---|---|---|---|---|---|---|
MRK MRK Merck & Co., Inc. | $280.5B | 22.2x | +3.0% | 28.1% | Buy | +13.9% |
PFE PFE Pfizer Inc. | $150.8B | 9.0x | -3.3% | 11.8% | Hold | +2.9% |
LLY LLY Eli Lilly and Company | $932.6B | 28.6x | +14.3% | 35.0% | Buy | +27.5% |
ABB ABBV AbbVie Inc. | $362.6B | 14.4x | +7.7% | 6.9% | Buy | +25.2% |
BMY BMY Bristol-Myers Squibb Company | $115.4B | 9.0x | -0.6% | 15.0% | Hold | +9.7% |
AMG AMGN Amgen Inc. | $178.7B | 14.8x | +4.5% | 20.9% | Buy | +5.9% |
This peer comparison reflects companies with similar business models, product lines, or market positioning, supplemented by industry grouping when direct matches are limited.
MRK Dividend and Capital Return
MRK returns 4.7% total yield, led by a 2.87% dividend, raised 15 consecutive years. Buybacks add another 1.8%.
Dividend SustainableFCF Adequate
Total Shareholder Yield
4.7%
Dividend + buyback return per year
Buyback Yield
1.8%
Dividend Yield
2.87%
Payout Ratio
44.8%
How MRK Splits Its Return
Div 2.87%
Buyback 1.8%
Dividend 2.87%Buybacks 1.8%
Dividend Profile
Yield, cadence, and growth quality
Dividend / Share
Trailing annualized cash dividend
$3.26
Growth Streak
Consecutive years of dividend increases
15Y
3Y Div CAGR
5.4%
5Y Div CAGR
6.7%
Ex-Dividend Date
—
Payment Cadence
Quarterly
4 payments over the last 12 months
Buyback Engine
How much per-share support comes from repurchases
Repurchases (TTM)
Cash used for buybacks in the latest trailing period
$5.1B
Estimated Shares Retired
45M
Approx. Share Reduction
1.8%
Shares Outstanding
Current diluted share count from the screening snapshot
2.5B
At 1.8%/year, buybacks mechanically lift EPS even with flat earnings — each remaining share represents a slightly larger piece of the company.
| Year | Div / Share | YoY Grw | BB Yield | Total Yield |
|---|---|---|---|---|
| 2026 | $0.85 | — | — | — |
| 2025 | $3.28 | +5.1% | 1.9% | 5.0% |
| 2024 | $3.12 | +5.4% | 0.5% | 3.6% |
| 2023 | $2.96 | +5.7% | 0.5% | 3.2% |
| 2022 | $2.80 | +7.3% | 0.0% | 2.5% |
FAQ
7 questionsMRK Investor Questions
Common questions answered from live analyst data and company financials.
01Is Merck & Co., Inc. (MRK) stock a buy or sell in 2026?
Merck & Co., Inc. (MRK) is rated Buy by Wall Street analysts as of 2026. Of 37 analysts covering the stock, 25 rate it Buy or Strong Buy, 11 rate it Hold, and 1 rate it Sell or Strong Sell. The consensus 12-month price target is $129, implying +13.9% from the current price of $114. The bear case scenario is $22 and the bull case is $137.
02What is the MRK stock price target for 2026?
The Wall Street consensus price target for MRK is $129 based on 37 analyst estimates. The high-end target is $150 (+32.1% from today), and the low-end target is $100 (-11.9%). The base case model target is $134.
03Is Merck & Co., Inc. (MRK) stock overvalued in 2026?
MRK trades at 22.2x times forward earnings. The stock currently trades at a discount to the broader market. Based on current multiples versus the peer group, the relative model signals significantly undervalued. Whether the stock is over or undervalued ultimately depends on whether consensus earnings estimates are achievable.
04What are the main risks for Merck & Co., Inc. (MRK) stock in 2026?
The primary risks for MRK in 2026 are: (1) Keytruda Exclusivity & Biosimilar Threat — Merck’s flagship oncology drug Keytruda is set to lose market exclusivity between 2028 and 2029, opening the door to biosimilar competition that is expected to materially reduce sales. (2) Regulatory & Litigation Risk — Delays or rejections in FDA approvals for new products can negatively impact investor confidence and sales. (3) Patent Cliff & Pipeline Uncertainty — Beyond Keytruda, Merck faces a broader patent cliff later in the decade, adding uncertainty to long‑term growth. Each factor has the potential to pressure earnings or compress the stock's valuation multiple.
05What is Merck & Co., Inc.'s revenue and earnings forecast?
Analyst consensus estimates MRK will report consensus revenue of $66.9B (+3.0% year-over-year) and EPS of $6.48 (-11.7% year-over-year) for the upcoming fiscal year. The following year, analysts project $69.6B in revenue.
06When does Merck & Co., Inc. (MRK) report its next earnings?
A confirmed upcoming earnings date for MRK is not yet available. Check the Earnings section above for the most recent quarterly report dates and forward estimates.
07How much free cash flow does Merck & Co., Inc. generate?
Merck & Co., Inc. (MRK) generated $12.4B in free cash flow over the trailing twelve months — a free cash flow margin of 19.0%. MRK returns capital to shareholders through dividends (2.9% yield) and share repurchases ($5.1B TTM).