Upside case
Bull case
$170+49.5%
MRK would need investors to value it at roughly 33x earnings — about 11x more generous than today's 22x forward P/E. That requires meaningful multiple expansion on top of continued earnings growth.
Analysis OverviewBuyUpdated Jun 18, 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
$132
+15.6% vs today
Scenario Range
$81 – $170
Model bear to bull value window
Coverage
37
Published analyst ratings
Valuation Context
22.2x
Forward P/E · Market cap $281.2B
MRK price targets
Three scenarios for where MRK stock could go
Current
~$114
Confidence
46 / 100
Updated
Jun 18, 2026
Where we are now
Current · $114
Bear
$81
Base
$129
Bull
$170
Market caseClosest to today
Base case
$129+13.4%
At 25x 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
$81-28.5%
If investor confidence fades or macro conditions deteriorate, a 6x multiple contraction could push MRK down roughly 29% 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
$281.2B
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
$67.7B
+4.2% YoY
FY2
$70.1B
+3.7% YoY
EPS Outlook
FY1
$7.34
+0.1% YoY
FY2
$8.26
+12.5% YoY
Trailing FCF (TTM)$12.4B
FCF Margin: 19.0%
Next Earnings
August 4, 2026
Expected EPS
$2.10
Expected Revenue
$16.4B
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
Cheap versus peers
Fair value est. $156 — implies +37.0% from today's price.
Upside to Fair Value
37.0%
potential upside
Deep DiscountFair ValueVery Expensive
vs S&P 500 Trailing P/E
MRK
15.6x
vs
S&P 500
24.4x
36% discount
vs Healthcare Trailing P/E
MRK
15.6x
vs
Healthcare
22.1x
29% 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
18.8x
+18%
Healthcare
18.3x
+21%
5Y Avg
—
—
Trailing PE
15.6x
S&P 500
24.4x
-36%
Healthcare
22.1x
-29%
5Y Avg
15.9x
-2%
PEG Ratio
0.74x
S&P 500
1.66x
-56%
Healthcare
1.59x
-54%
5Y Avg
—
—
EV/EBITDA
10.8x
S&P 500
15.2x
-29%
Healthcare
14.2x
-24%
5Y Avg
18.7x
-42%
Price/FCF
22.8x
S&P 500
20.7x
+10%
Healthcare
18.5x
+23%
5Y Avg
21.0x
+8%
Price/Sales
4.3x
S&P 500
3.1x
+40%
Healthcare
2.6x
+64%
5Y Avg
4.3x
+1%
Dividend Yield
2.86%
S&P 500
1.91%
+50%
Healthcare
1.50%
+91%
5Y Avg
2.95%
-3%
| Metric | MRK | S&P 500 | Healthcare | 5Y Avg MRK |
|---|---|---|---|---|
| Forward PE | 22.2x | 18.8x+18% | 18.3x+21% | — |
| Trailing PE | 15.6x | 24.4x-36% | 22.1x-29% | 15.9x |
| PEG Ratio | 0.74x | 1.66x-56% | 1.59x-54% | — |
| EV/EBITDA | 10.8x | 15.2x-29% | 14.2x-24% | 18.7x-42% |
| Price/FCF | 22.8x | 20.7x | 18.5x+23% | 21.0x |
| Price/Sales | 4.3x | 3.1x+40% | 2.6x+64% | 4.3x |
| Dividend Yield | 2.86% | 1.91% | 1.50% | 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 June 17, 2026
High Risk
Keytruda reliance
Heavy reliance on Keytruda poses a significant risk as it drives a large portion of revenue, making the company vulnerable to any setbacks in this product.
High Risk
Regulatory pricing pressure
Pricing pressure from regulators could impact profitability, especially for key drugs like Keytruda.
Medium
Pipeline/R&D uncertainty
The chance that pipeline assets or R&D efforts fail to deliver expected results could limit future growth.
Medium
Market risk performance
Reported Market Risk Adjusted Performance of -0.2% and Risk Adjusted Performance of -0.04% indicate potential volatility and underperformance.
Lower
Diversification challenges
Despite a broad portfolio, the company's heavy focus on pharmaceuticals and biosciences may limit diversification benefits.
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 June 17, 2026
Institutional options activity
Unusually large institutional options trades, such as the purchase of 30,000 call contracts, signal high-conviction bullish sentiment among sophisticated market participants.
Undervalued intrinsic value
A DCF model suggests Merck's intrinsic value ranges from $125 to $213, with the current price offering a +43% margin of safety at the midpoint.
Diverse healthcare portfolio
Merck operates globally with a broad portfolio in healthcare, life sciences, and electronics, positioning it to tackle major health threats and improve lives.
Strong scientific innovation
The company's focus on scientific advancement and best-in-class products for pharmaceutical development drives long-term growth and industry leadership.
Hyper-growth potential
Merck is viewed as a profitable, hyper-growth company with significant market reach and brand-name backing, supporting a bullish investment thesis.
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
$113.87
52W Range Position
77%
52-Week Range
Current price plotted between the 52-week low and high.
52-Week Low
$76.66
+48.5% from the low
52-Week High
$125.14
-9.0% from the high
1 Month
+1.17%
3 Month
-0.53%
YTD
+7.0%
1 Year
+43.6%
3Y CAGR
+1.1%
5Y CAGR
+8.2%
10Y CAGR
+7.8%
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 15.1x median
+47% above peer median
Revenue Growth
+4.2%
vs +6.2% median
-33% 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. | $281.2B | 22.2x | +4.2% | 28.1% | Buy | +15.6% |
PFE PFE Pfizer Inc. | $143.5B | 8.5x | 0.0% | 11.8% | Hold | +6.1% |
LLY LLY Eli Lilly and Company | $1.04T | 30.0x | +15.1% | 35.0% | Buy | +15.8% |
ABB ABBV AbbVie Inc. | $383.2B | 15.2x | +8.7% | 6.9% | Buy | +18.6% |
BMY BMY Bristol-Myers Squibb Company | $110.3B | 8.5x | +1.0% | 15.0% | Hold | +15.9% |
AMG AMGN Amgen Inc. | $182.2B | 15.1x | +6.2% | 20.9% | Buy | +3.5% |
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 2.86% 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
2.86%
Payout Ratio
44.8%
How MRK Splits Its Return
Div 2.86%
Buyback 1.8%
Dividend 2.86%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 | $1.70 | — | — | — |
| 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 $132, implying +15.6% from the current price of $114. The bear case scenario is $81 and the bull case is $170.
02What is the MRK stock price target for 2026?
The Wall Street consensus price target for MRK is $132 based on 37 analyst estimates. The high-end target is $150 (+31.7% from today), and the low-end target is $100 (-12.2%). The base case model target is $129.
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 cheap versus peers. 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 reliance — Heavy reliance on Keytruda poses a significant risk as it drives a large portion of revenue, making the company vulnerable to any setbacks in this product. (2) Regulatory pricing pressure — Pricing pressure from regulators could impact profitability, especially for key drugs like Keytruda. (3) Pipeline/R&D uncertainty — The chance that pipeline assets or R&D efforts fail to deliver expected results could limit future 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 $67.7B (+4.2% year-over-year) and EPS of $7.34 (+0.1% year-over-year) for the upcoming fiscal year. The following year, analysts project $70.1B in revenue.
06When does Merck & Co., Inc. (MRK) report its next earnings?
Merck & Co., Inc. is expected to report its next earnings on approximately 2026-08-04. Consensus expects EPS of $2.10 and revenue of $16.4B. Over recent quarters, MRK has beaten EPS estimates 92% of the time.
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).