Education
About Us
Working with TipRanks
Follow Us
Merck & Company (MRK)
NYSE:MRK
Top Page
Merck & Company
(NYSE:MRK)
73Outperform
Positive Factors
Product Growth
Januvia and Janumet similarly surprised with higher revenues (+49% and +16% respectively) likely due to the lowering of list prices to align closer with net pricing, reducing the company's overall paid rebate.
Revenue Performance
Merck was able to modestly beat revenue expectations driven partially by a ~15% beat for Winrevair with $280M in revenue for the quarter.
Negative Factors
Market Challenges
Recent ACIP HPV vaccine working group discussion seems to further suggest that ACIP is considering reducing the recommended number of Gardasil vaccines.
Product Performance
Keytruda underperformed slightly (-3% vs. consensus) and Gardasil revenues in China continue to be more challenged (-10% vs. consensus).
Merck & Company (MRK) vs. S&P 500 (SPY)
Market Cap
$208.21B
Dividend Yield3.96%
Average Volume (3M)17.68M
Price to Earnings (P/E)11.6
Beta (1Y)0.38
Revenue Growth4.26%
EPS GrowthN/A
CountryUS
Employees73,000
SectorHealthcare
Sector Strength69
IndustryDrug Manufacturers - General
Share Statistics
EPS (TTM)6.87
Shares Outstanding2,516,394,000
10 Day Avg. Volume16,564,095
30 Day Avg. Volume17,684,199
Financial Highlights & Ratios
PEG Ratio0.00256
Price to Book (P/B)N/A
Price to Sales (P/S)3.67
Price to Cash Flow (P/CF)17.00
P/FCF Ratio17.00
Enterprise Value/Market CapN/A
Enterprise Value/RevenueN/A
Enterprise Value/Gross ProfitN/A
Enterprise Value/EbitdaN/A
Forecast
1Y Price Target
$106.06Price Target Upside28.18% Upside
Rating ConsensusModerate Buy
Number of Analyst Covering18
Merck & Company Business Overview & Revenue Model
Company DescriptionMerck & 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 MoneyMerck & Company generates revenue primarily through the sale of pharmaceutical products, vaccines, and animal health products. The company's pharmaceutical segment is its largest revenue stream, driven by key products such as Keytruda (an immunotherapy for cancer treatment), Gardasil (a vaccine for HPV), and Januvia/Janumet (medications for type 2 diabetes). Merck also earns substantial revenue from its Animal Health division, which provides veterinary pharmaceuticals and vaccines. The company engages in strategic partnerships and collaborations with other pharmaceutical companies, research institutions, and healthcare providers to enhance its product pipeline and expand market reach. Additionally, Merck invests significantly in research and development to innovate new treatments, contributing to its long-term revenue growth and competitive position in the healthcare industry.
Merck & Company Financial Statement Overview
Summary
Merck & Company shows robust revenue growth and improved profit margins, with a strong balance sheet reflecting reduced debt levels. However, cash flow volatility and incomplete data for 2024 present challenges in fully assessing liquidity and capital allocation efficiency.Income Statement
Merck & Company has shown consistent revenue growth over the past years, with a notable increase from $41.5 billion in 2020 to $64.2 billion in 2024. The gross profit margin is strong at 80.82%, and the net profit margin significantly improved to 26.68% in 2024, indicating effective cost management and profitability enhancement. However, there was a dip in EBIT and EBITDA margins in 2023, which recovered in 2024, reflecting some operational challenges.85
Very Positive
Balance Sheet
The balance sheet indicates a solid equity position with stockholders' equity at $44.56 billion in 2024. The debt-to-equity ratio was effectively managed, decreasing from 0.84 in 2020 to 0 by 2024, which significantly reduces financial risk. However, the absence of total assets data for 2024 limits the complete assessment of the company's asset utilization and leverage.75
Positive
Cash Flow
Merck's free cash flow has shown volatility, with a decrease from $9.67 billion in 2021 to $0 in 2024 due to missing data. Operating cash flow was strong in 2023 at $13.01 billion, though data for subsequent periods are unavailable. The fluctuations in cash flow highlight potential concerns in cash management and capital expenditure strategies.70
Positive
| Breakdown | ||||
| Dec 2024 | Dec 2023 | Dec 2022 | Dec 2021 | Dec 2020 |
|---|---|---|---|---|
| Income Statement | Total Revenue | |||
| 64.17B | 60.12B | 59.28B | 48.70B | 41.52B | Gross Profit |
| 51.88B | 43.99B | 41.87B | 35.08B | 27.90B | EBIT |
| 22.69B | 2.95B | 19.40B | 13.70B | 6.08B | EBITDA |
| 26.94B | 6.91B | 21.32B | 17.90B | 10.18B | Net Income Common Stockholders |
| 17.12B | 365.00M | 14.52B | 13.05B | 7.07B |
| Balance Sheet | Cash, Cash Equivalents and Short-Term Investments | |||
| 13.69B | 7.09B | 13.19B | 8.10B | 8.06B | Total Assets |
| 77.28B | 106.67B | 109.16B | 105.69B | 91.59B | Total Debt |
| 37.11B | 36.27B | 30.69B | 33.10B | 31.79B | Net Debt |
| 23.87B | 29.43B | 18.00B | 25.01B | 23.73B | Total Liabilities |
| 30.97B | 69.04B | 63.10B | 67.44B | 66.18B | Stockholders Equity |
| 46.31B | 37.58B | 45.99B | 38.18B | 25.32B |
| Cash Flow | Free Cash Flow | |||
| 18.10B | 9.14B | 14.71B | 9.66B | 5.57B | Operating Cash Flow |
| 21.47B | 13.01B | 19.09B | 14.11B | 10.25B | Investing Cash Flow |
| -7.73B | -14.08B | -4.96B | -16.55B | -9.44B | Financing Cash Flow |
| -7.03B | -4.81B | -9.12B | 2.59B | -2.83B |
Merck & Company Technical Analysis
Neutral
82.74
Price Trends
86.98
Negative
91.98
Negative
101.03
Negative
Market Momentum
-2.56
Negative
49.33
Neutral
79.45
Neutral
Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For MRK, the sentiment is Neutral. The current price of 82.74 is above the 20-day moving average (MA) of 81.47, below the 50-day MA of 86.98, and below the 200-day MA of 101.03, indicating a neutral trend. The MACD of -2.56 indicates Negative momentum. The RSI at 49.33 is Neutral, neither overbought nor oversold. The STOCH value of 79.45 is Neutral, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Neutral sentiment for MRK.
Merck & Company Risk Analysis
Merck & Company disclosed 31 risk factors in its most recent earnings report. Merck & Company reported the most risks in the “Legal & Regulatory” category.
Finance & Corporate - Financial and accounting risks. Risks related to the execution of corporate activity and strategy
Latest Risks Added 0 New Risks
Merck & Company Peers Comparison
Overall Rating
UnderperformOutperform
Sector (51)
Financial Indicators
Name | Overall Rating | Market Cap | P/E Ratio | ROE | Dividend Yield | Revenue Growth | EPS Growth |
|---|---|---|---|---|---|---|---|
80 Outperform | $212.67B | 18.79 | 26.33% | 2.92% | 1.08% | -17.73% | |
73 Outperform | $208.21B | 11.62 | 40.81% | 3.96% | 4.26% | ― | |
73 Outperform | $214.69B | 30.65 | 17.60% | 2.18% | 18.03% | 18.11% | |
70 Outperform | $125.03B | 21.43 | 7.34% | 2.82% | -4.57% | 2.96% | |
68 Neutral | $129.99B | 16.17 | 9.05% | 7.37% | 8.77% | 272.80% | |
60 Neutral | $150.99B | 37.02 | 67.55% | 3.25% | 18.64% | -39.39% | |
51 Neutral | $5.32B | 3.41 | -40.36% | 2.89% | 17.93% | 2.52% |
* Healthcare Sector Average
Performance Comparison
MRK
Merck & Company
82.74
-43.63
-34.53%
AMGN
Amgen
280.84
12.64
4.71%
AZN
AstraZeneca
69.57
-4.42
-5.97%
NVS
Novartis
112.14
17.91
19.01%
PFE
Pfizer
22.92
-1.21
-5.01%
SNY
Sanofi
52.32
4.68
9.82%
Merck & Company Earnings Call Summary
Earnings Call Date: Apr 24, 2025 | % Change Since: 5.08% | Next Earnings Date: Jul 29, 2025
Earnings Call Sentiment Neutral
The call presented a balanced view with strong emphasis on future growth potential through a robust pipeline and key product launches, while addressing challenges such as declining Gardasil sales in China and the impact of tariffs and foreign exchange. While there are significant growth drivers, the lowlights indicate notable challenges that could affect near-term performance.Highlights
Strong Pipeline and Future Growth Potential
Merck highlighted a robust pipeline with over 20 new products expected to launch in the next few years, most of which have blockbuster potential, contributing to a potential commercial opportunity of over $50 billion by the mid-2030s.
Key Product Launches and Growth Drivers
Significant contributions from new products WinRevair and Capfaxiv, with WinRevair achieving global sales of $280 million and robust uptake in the treatment of pulmonary arterial hypertension.
Oncology Segment Performance
Keytruda sales grew by 6% to $7.2 billion with strong demand in both early-stage and metastatic cancers. Welireg sales increased 63% to $137 million, leading in the treatment of advanced renal cell carcinoma.
Animal Health Business Growth
The animal health segment delivered a strong performance with sales increasing by 10% due to higher demand across all species and recent acquisitions.
Lowlights
Decline in Gardasil Sales in China
Gardasil sales decreased by 40% due to elevated channel inventories and soft demand in China, impacting global growth negatively by seven percentage points.
Impact of Tariffs on Financial Outlook
Approximately $200 million in costs from tariffs primarily between the US and China, with potential further impacts from additional tariffs on pharmaceuticals.
Challenges in Foreign Exchange Impact
Foreign exchange negatively impacted revenues by approximately 1%, affecting overall financial performance.
Company Guidance
During the Merck & Co., Inc. Q1 2025 earnings call, the company reported revenues of $15.5 billion, reflecting a 1% increase excluding foreign exchange impacts. Oncology sales, driven by Keytruda, grew by 6% to $7.2 billion, while new products like WinRevair and Capfaxiv also contributed positively. Gardasil sales decreased by 40% due to reduced demand in China, but global growth excluding China was 8%. The company maintained its 2025 revenue guidance of $64.1 to $65.6 billion, with expected EPS of $8.82 to $8.97. Merck highlighted a strong pipeline with over 20 potential blockbuster products and investments in US manufacturing totaling more than $21 billion since 2018. The call also addressed tariff impacts, with $200 million in costs anticipated, and emphasized ongoing efforts to optimize the supply chain.Merck & Company Corporate Events
Executive/Board Changes
Merck & Co. Expands Board with New Director
Positive
Nov 22, 2024
Merck & Co. announced that Surendralal L. Karsanbhai, CEO of Emerson Electric Co., will join its Board of Directors effective January 1, 2025, bringing his extensive business expertise. The board, which will consist of 13 members with his addition, anticipates valuable contributions from his global perspective. This move aligns with Merck’s ongoing commitment to leading-edge science and innovation in the pharmaceutical industry.
Glossary
OutperformA stock rated as "Outperform" is expected to perform better than the overall market or a specific benchmark over the near-to-medium term. This rating suggests that the stock is likely to deliver higher returns compared to the average returns of other stocks in the same sector or market index. Investors might consider this stock a good buying opportunity.
NeutralA stock rated as "Neutral" is expected to perform in line with the overall market or a specific benchmark. This rating indicates that the stock is neither particularly attractive nor unattractive for investment. Investors may consider holding onto the stock, as it is not expected to either significantly outperform or underperform the market.
UnderperformA stock rated as "Underperform" is expected to perform worse than the overall market or a specific benchmark over the near-to-medium term. This rating suggests that the stock may deliver lower returns compared to the average returns of other stocks in the same sector or market index. Investors might consider selling the stock or avoiding it as an investment.
Disclaimer
This AI Analyst Stock Report is automatically generated by our AI systems using advanced algorithms and publicly available financial, technical, and market data. While the information provided aims to be accurate and insightful, it is intended for informational purposes only and should not be considered financial advice. Any content created by an AI (Artificial Intelligence) system may contain inaccuracies and/or contain errors. Investing in stocks carries inherent risks, and past performance is not indicative of future results. This report does not account for your personal financial circumstances, objectives, or risk tolerance. Always conduct your own research or consult with a qualified financial advisor before making investment decisions. The analysis and recommendations provided are based on historical and current data and may not fully reflect future market conditions or unexpected developments. Neither the creators of this report nor its affiliated entities guarantee the accuracy, completeness, or reliability of the information presented. Use this report at your own discretion and risk.