Merck & Co., Inc. (MRK) Stock Analysis — Fair Value, Risk & Moat Rating
NYQ · Healthcare · Drug Manufacturers - General
Is Merck & Co., Inc. a safe investment right now?
Merck & Co., Inc.'s Altman Z-Score of 3.89 places it in the safe zone. Our fair value estimate is $84.61 (Overvalued). Moat rating: 3.7/5 stars.
Could Merck & Co., Inc. go bankrupt? Altman Z-Score analysis
Z-Score of 3.89 is above 3.0, indicating the company is financially healthy by this metric.
- Below 1.8 — Distress Zone (high bankruptcy risk)
- 1.8 to 3.0 — Gray Zone (elevated uncertainty)
- Above 3.0 — Safe Zone (financially healthy)
What drives MRK's Z-Score?
| Component | Formula | Value | Weight | Contribution |
|---|---|---|---|---|
| A · Working Capital / Total Assets | WC / TA | 0.111 | 1.2 | 0.13 |
| B · Retained Earnings / Total Assets | RE / TA | 0.5339 | 1.4 | 0.75 |
| C · EBIT / Total Assets | EBIT / TA | 0.1638 | 3.3 | 0.54 |
| D · Market Cap / Total Liabilities | MCap / TL | 3.3147 | 0.6 | 1.99 |
| E · Revenue / Total Assets | Rev / TA | 0.475 | 1.0 | 0.47 |
How has MRK's financial health changed over time?
| Year | Z-Score | Zone |
|---|---|---|
| 2022 | 4.63 | Safe |
| 2023 | 3.86 | Safe |
| 2024 | 4.37 | Safe |
| 2025 | 3.89 | Safe |
Source: Calculated from MRK's latest 10-K filing on SEC EDGAR.
What is Merck & Co., Inc. actually worth?
How we calculated this
| Input | Value | Source |
|---|---|---|
| Predicted EPS (α) | $6.41 | Proprietary blend of reported actuals + analyst consensus, weighted by α |
| Last Year EPS | $7.28 | Annual report (SEC EDGAR) |
| Analyst Consensus EPS (This Year) | $5.11 | 27 analysts consensus |
| Trailing P/E | 15.5x | Current market pricing |
| Fair P/E (β discount) | 13.2x | Trailing PE adjusted by value discount factor β, hard-capped |
| Earnings Trend (γ) | Declining | Directional signal: predicted vs trailing EPS |
Wall Street Reference: Analyst consensus target price is $129.81 (27 analysts). This is shown for reference only and is not used in our valuation model.
Source: Earnings data from SEC EDGAR filings. Market data via Yahoo Finance.
Does Merck & Co., Inc. have a durable competitive advantage?
Moat rating: 3.7/5.
What makes up MRK's moat score?
ROIC Stability
ROIC variability over the past decade. Score: 4/5.
Gross Margin Trend
Gross margin trajectory over the past decade. Score: 4/5.
Switching Costs
Estimated customer lock-in based on margin level. Score: 3/5.
How stable is MRK's return on invested capital?
| Year | ROIC | Trend |
|---|---|---|
| 2022 | 22.7% | — |
| 2023 | 4.2% | Declining |
| 2024 | 25.4% | Rising |
| 2025 | 22.0% | Declining |
Source: ROIC calculated from SEC EDGAR filings.
Is Merck & Co., Inc.'s dividend safe?
Can Merck & Co., Inc. afford its dividend?
Payout ratio is 45.1%. FCF covers the dividend 2.1x. 65 consecutive years of payments.
Merck & Co., Inc.'s key financial metrics
| Metric | Latest | 1Y Ago | 3Y Ago | Trend |
|---|---|---|---|---|
| Revenue | $65.0B | $64.2B | $59.3B | Rising |
| Net Income | $18.3B | $17.1B | $14.5B | Rising |
| Free Cash Flow | $12.4B | $18.1B | $14.7B | Declining |
| Gross Margin | 74.8% | 76.3% | 70.6% | Rising |
Recent events that affect our MRK analysis
MRK earnings report scheduled
Upcoming report. Consensus EPS estimate: $-1.47. Revenue estimate: $15.91B. Our current Fair Value: $84.61 — a significant beat or miss could shift this estimate.
MRK analyst consensus: 66% bullish (19 of 29 analysts)
4 Strong Buy, 15 Buy, 10 Hold, 0 Sell, 0 Strong Sell. Consensus target: $129.81 (15.0% upside). Compare with our independent Fair Value: $84.61.
MRK paid $0.8500/share dividend
Dividend Safety Grade: A. Payout ratio: 45.1%.
MRK filed annual report (10-K)
Annual filing with full-year financials. Our Altman Z-Score, Moat, and Fair Value models are derived from this data. View on SEC EDGAR →
MRK missed EPS estimates by 29.2%
Reported EPS: $1.19 vs estimate $1.68. Our Fair Value of $84.61 may face downward pressure if the trend continues.
MRK filed 8-K (material event)
8-K filings disclose material events — acquisitions, leadership changes, or guidance revisions that may affect valuation. View on SEC EDGAR →
MRK paid $0.8500/share dividend
Dividend Safety Grade: A. Payout ratio: 45.1%.
MRK filed 8-K (material event)
8-K filings disclose material events — acquisitions, leadership changes, or guidance revisions that may affect valuation. View on SEC EDGAR →
MRK filed quarterly report (10-Q)
Quarterly update with interim financials. May signal changes to earnings trajectory and balance sheet health. View on SEC EDGAR →
MRK beat EPS estimates by 9.8%
Reported EPS: $2.58 vs estimate $2.35. Earnings strength supports our Fair Value of $84.61 (25.1% below current price).
MRK filed 8-K (material event)
8-K filings disclose material events — acquisitions, leadership changes, or guidance revisions that may affect valuation. View on SEC EDGAR →
MRK paid $0.8100/share dividend
Dividend Safety Grade: A. Payout ratio: 45.1%.
MRK filed 8-K (material event)
8-K filings disclose material events — acquisitions, leadership changes, or guidance revisions that may affect valuation. View on SEC EDGAR →
MRK filed quarterly report (10-Q)
Quarterly update with interim financials. May signal changes to earnings trajectory and balance sheet health. View on SEC EDGAR →
MRK beat EPS estimates by 5.0%
Reported EPS: $2.13 vs estimate $2.03. Earnings strength supports our Fair Value of $84.61 (25.1% below current price).
MRK filed 8-K (material event)
8-K filings disclose material events — acquisitions, leadership changes, or guidance revisions that may affect valuation. View on SEC EDGAR →
MRK paid $0.8100/share dividend
Dividend Safety Grade: A. Payout ratio: 45.1%.
MRK filed 8-K (material event)
8-K filings disclose material events — acquisitions, leadership changes, or guidance revisions that may affect valuation. View on SEC EDGAR →
MRK filed quarterly report (10-Q)
Quarterly update with interim financials. May signal changes to earnings trajectory and balance sheet health. View on SEC EDGAR →
MRK beat EPS estimates by 4.0%
Reported EPS: $2.22 vs estimate $2.14. Earnings strength supports our Fair Value of $84.61 (25.1% below current price).
MRK filed 8-K (material event)
8-K filings disclose material events — acquisitions, leadership changes, or guidance revisions that may affect valuation. View on SEC EDGAR →
MRK paid $0.8100/share dividend
Dividend Safety Grade: A. Payout ratio: 45.1%.
MRK filed annual report (10-K)
Annual filing with full-year financials. Our Altman Z-Score, Moat, and Fair Value models are derived from this data. View on SEC EDGAR →
MRK beat EPS estimates by 3.3%
Reported EPS: $1.72 vs estimate $1.67. Earnings strength supports our Fair Value of $84.61 (25.1% below current price).
MRK filed 8-K (material event)
8-K filings disclose material events — acquisitions, leadership changes, or guidance revisions that may affect valuation. View on SEC EDGAR →
Common questions about Merck & Co., Inc.
What is Merck & Co., Inc. stock price today?
Merck & Co., Inc. (MRK) stock price is $112.89 as of the latest market close, traded on the NYSE exchange.
What does Merck & Co., Inc. do?
Merck & Co., Inc. operates as a healthcare company worldwide. It offers human health pharmaceutical for various areas under the Keytruda, Keytruda Qlex, Welireg, Gardasil, ProQuad, M-M-R II, Varivax, Vaxneuvance, Capvaxive, RotaTeq, Pneumovax 23, Bridion, Prevymis, Dificid, Zerbaxa, Winrevair, Adempas/ Verquvo, Ohtuvayre, Lagevrio, Isentress/Isentress HD, Delstrigo, Pifeltro, Belsomra, Januvia, and Janumet brands.
What is Merck & Co., Inc. market cap?
Merck & Co., Inc. has a market capitalization of $279.11B, classifying it as a mega-cap stock in the Healthcare sector.
What sector and industry is MRK in?
Merck & Co., Inc. operates in the Healthcare sector, specifically within the Drug Manufacturers - General industry. It trades on the NYSE under the ticker symbol MRK.
Is MRK stock overvalued or undervalued?
Based on our valuation model, Merck & Co., Inc. trades 33.4% above our fair value estimate — potentially overvalued.
- FairValueLabs Fair Value: $84.61
- Current Price: $112.89
- Valuation Zone: Overvalued
What is MRK stock forecast and analyst target price?
Based on 27 Wall Street analysts, the consensus price target for Merck & Co., Inc. is $129.81, implying upside of 15.0% from the current price.
- Analyst High Target: $150.00
- Analyst Low Target: $100.00
Note: Analyst targets are shown for reference and are not used in our valuation model.
Is Merck & Co., Inc. revenue and earnings growing?
Here are the analyst consensus growth estimates for Merck & Co., Inc.:
- Revenue growth (current year est.): 2.4%
- EPS growth (current year est.): -43.0%
- Revenue growth (next year est.): 5.3%
- EPS growth (next year est.): 90.3%
What are Merck & Co., Inc.'s key financial metrics?
| Metric | Latest | Trend |
|---|---|---|
| Revenue | $65.0B | Rising |
| Net Income | $18.3B | Rising |
| Free Cash Flow | $12.4B | Declining |
| Gross Margin | 74.8% | Rising |
What is MRK's P/E ratio?
The price-to-earnings ratio measures how much investors pay per dollar of earnings:
- Trailing P/E (last 12 months): 15.5x
- Forward P/E (next 12 months est.): 11.6x
- FairValueLabs Fair P/E: 13.2x
How volatile is MRK stock?
Merck & Co., Inc. has a beta of 0.28, meaning it is less volatile than the broader market. A beta above 1.0 indicates higher price swings relative to the S&P 500, while below 1.0 suggests more stability.
How much cash and debt does Merck & Co., Inc. have?
Merck & Co., Inc.'s balance sheet shows:
- Total Cash: $14.57B
- Total Debt: $50.53B
- Net Cash Position: $-35.97B
A positive net cash position means the company holds more cash than debt, reducing financial risk.
What is Merck & Co., Inc.'s free cash flow?
Merck & Co., Inc. generated $11.89B in trailing twelve-month free cash flow (from $16.47B in operating cash flow). Free cash flow represents the cash available for dividends, buybacks, and debt reduction after all capital expenditures.
Does Merck & Co., Inc. pay a dividend, and is it safe?
Yes, Merck & Co., Inc. pays a regular dividend. Here are the key metrics:
- Dividend Yield: 2.9%
- Payout Ratio: 45.1%
- Consecutive Years Paid: 65
- 5-Year Dividend Growth: -20.1%
- FairValueLabs Safety Grade: A
Is Merck & Co., Inc. at risk of going bankrupt?
Merck & Co., Inc.'s Altman Z-Score is 3.89, placing it in the safe zone (above 3.0) — bankruptcy risk is low. The Z-Score uses five balance sheet ratios to predict bankruptcy probability within two years.
Does Merck & Co., Inc. have a durable competitive advantage?
Merck & Co., Inc. scores 3.7/5 stars (Solid moat · eroding) in our moat analysis:
- ROIC Stability: 4/5
- Gross Margin Trend: 4/5
- Switching Costs: 3/5
A score above 3.5 suggests meaningful pricing power and a defensible market position.
What is MRK's return on equity (ROE)?
Merck & Co., Inc.'s return on equity is 36.9%. ROE measures how efficiently a company generates profits from shareholder equity. An ROE above 15% is generally considered strong, while below 10% may signal inefficiency.
How do I buy MRK stock?
MRK shares can be purchased through any brokerage account that provides access to the NYSE. Common steps:
- Open an account with a broker (e.g., Fidelity, Schwab, Interactive Brokers)
- Search for ticker symbol MRK
- Place a market or limit order for your desired number of shares
This is not investment advice. Always do your own research before buying any stock.
Is MRK a value stock or speculative?
FairValueLabs classifies Merck & Co., Inc. as Value Investment. It exhibits consistent profitability, reasonable valuation, and financial stability — characteristics of a traditional value investment.
Who is the CEO of Merck & Co., Inc.?
The current CEO of Merck & Co., Inc. is Mr. Robert M. Davis J.D..
What is MRK's earnings per share (EPS)?
Earnings per share measures the company's profit allocated to each outstanding share:
- Trailing EPS (last 12 months): $7.28
- Forward EPS (next 12 months est.): $9.71
- Analyst consensus EPS (this year): $5.11
- Analyst consensus EPS (next year): $9.74
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FairValueLabs Disclaimer
All valuations, scores, ratings, and classifications on this page are produced by the FairValueLabs internal valuation system. They do not represent actual market value, guaranteed outcomes, or professional investment advice. These are analytical estimates for educational and research purposes only.
This is not financial advice. All data is sourced from SEC EDGAR public filings. Always consult a qualified financial advisor before making investment decisions.
Last updated: Apr 22, 2026. Data sources: SEC EDGAR (financial statements), Yahoo Finance (market data, analyst consensus). Data may not reflect the most recent quarter.
MRK analysis methodology: How we calculate fair value, Z-Scores, and moat ratings