MODEL VERDICT
Merck & Co., Inc. (MRK) — Relative Valuation
Peer multiples, Monte Carlo simulation & quality-adjusted fair value
Popular:
Peer multiples, Monte Carlo simulation & quality-adjusted fair value
Composite score derived from valuation, quality, and risk factors
Quantitative model thresholds · For educational and research purposes only
Each row records the model's monthly assessment. High Conviction = the model detected notable undervaluation vs peers. Neutral = no notable divergence was found. The return column shows the actual price change over 90 days for reference. This is a quantitative observation log — not investment advice.
| Date | Assessment | Score | Price | Status | 90d Fwd Return |
|---|---|---|---|---|---|
| Feb 28, 2026 | MODERATE | 0.66 | $123.78 | CURRENT | — |
| Feb 21, 2026 | MODERATE | 0.66 | $122.26 | CURRENT | — |
| Feb 14, 2026 | MODERATE | 0.66 | $121.41 | CURRENT | — |
| Feb 11, 2026 | MODERATE | 0.66 | $117.15 | CURRENT | — |
| Jan 11, 2026 | MODERATE | 0.67 | $110.53 | Pending | +6.4% |
Historical model observations for research purposes only. Past quantitative patterns do not predict future results. Not a recommendation to buy, sell, or hold any security.
| Methodology | Fair Value | vs Current | Weight | Quality | Status |
|---|---|---|---|---|---|
| Forward P/E 17 analyst estimates | $63.11 | -49.0% | 20% | A- | Analyst Est. |
| EV/EBITDA 16 industry peers | $159.45 | +28.8% | 20% | A- | Peer Data |
| Industry Median P/E 14 industry peers | $175.82 | +42.0% | 15% | A | Peer Data |
| EV/EBIT 16 industry peers | $214.91 | +73.6% | 8% | B+ | Peer Data |
| Peg Ratio 5 industry peers | $325.25 | +162.8% | 5% | B | Data |
| EV To Revenue 17 industry peers | $118.48 | -4.3% | 4% | B | Data |
| Price / Sales 17 industry peers | $107.73 | -13.0% | 3% | B | Model Driven |
| Earnings Yield 15 industry peers | $187.05 | +51.1% | 2% | B | Data |
| Weighted Output Blended model output | $241.93 | +95.5% | 100% | 72 | SIGNIFICANTLY UNDERVALUED |
| EPS Growth ↓ | P/E Multiple → | 13× | 15× | 17× (Current) | 19× | 21× |
|---|---|---|---|---|---|
| Bear Case (9%) | $103 | $118 | $134 | $150 | $166 |
| Conservative (14%) | $108 | $124 | $141 | $157 | $174 |
| Base Case (21.2%) | $115 | $132 | $150 | $168 | $185 |
| Bull Case (29%) | $122 | $141 | $159 | $178 | $197 |
Cross-sectional regression predicting expected multiples based on growth, margins, ROIC, and beta.
| Multiple | Avg | Median | Min | Max | Std |
|---|---|---|---|---|---|
| P/E Ratio | 127.58 | 19.43 | 14.46 | 778.71 | 287.17 |
| EV/EBIT | 30.30 | 17.31 | 12.53 | 101.19 | 32.05 |
| EV/EBITDA | 19.71 | 13.58 | 8.49 | 44.99 | 12.53 |
| P/FCF | 23.61 | 21.29 | 13.97 | 35.59 | 7.94 |
| P/FFO | 21.71 | 15.30 | 11.69 | 65.54 | 19.53 |
| P/TBV | 32.31 | 30.33 | 5.08 | 61.51 | 28.27 |
| P/AFFO | 141.62 | 21.60 | 13.86 | 742.45 | 294.42 |
| P/B Ratio | 6.50 | 6.12 | 5.08 | 8.61 | 1.42 |
| Div Yield | 0.03 | 0.03 | 0.02 | 0.03 | 0.00 |
| P/S Ratio | 4.55 | 4.62 | 3.94 | 5.72 | 0.63 |
Based on our peer multiples analysis with 21 valuation metrics, the model estimates MRK's fair value at $241.93 vs the current price of $123.78, implying +95.5% upside potential. Model verdict: Significantly Undervalued. Confidence: 72/100. This is a quantitative estimate, not a recommendation.
The blended fair value of $241.93 is calculated using four lenses: industry median multiples (40%), historical multiples (30%), forward estimates (20%), and quality-adjusted multiples (10%). Monte Carlo simulation (10,000 iterations) gives a range of $123.80 (P10) to $475.51 (P90), with a median of $223.19.
MRK's current P/E of 17.0x compares to the industry median of 24.2x (14 peers in the group). This represents a -29.6% discount to the industry. The historical average P/E is 127.6x over 7 years. Signal: Discount.
36 analysts cover MRK with a consensus rating of Buy. The consensus price target is $123.92 (range: $90.00 — $150.00), implying +0.1% upside from the current price. Grade breakdown: Strong Buy (0), Buy (24), Hold (11), Sell (1), Strong Sell (0).
The model confidence score is 72/100, based on: data completeness (21), peer quality (25), historical depth (20), earnings stability (4), and model agreement (2). Cyclicality penalty: -0 points. The model shows strong agreement across inputs.
The model flags several key risks: (1) Macro/regulatory risks are not captured in this model but remain material.
Peak earnings risk refers to the possibility that MRK's current profitability is above its sustainable long-term trend. The model detects a margin Z-score of +0.7σ, meaning margins are 0.7 standard deviations above their historical average. If margins revert to the 7-year mean (21.3%), the model estimates fair value drops by 46820.0% to approximately $703. This isn't a prediction — it's a scenario analysis.
No. This dashboard is a quantitative research tool for educational and informational purposes only. It is not investment advice, a solicitation, or a recommendation to buy, sell, or hold any security. The operator of this platform is not a registered investment advisor (RIA), broker-dealer, or financial planner. All model outputs, fair value estimates, signals, and scenarios are the result of automated quantitative computations and should not be construed as professional financial guidance. You should consult a qualified, licensed financial advisor before making any investment decisions. Past model performance is not indicative of future results.