Merck & Co., Inc. (MRK) is a publicly traded company in the Healthcare — Drug Manufacturers - General industry listed on NYSE. This overview shows the latest price, key valuation ratios, profitability metrics and financial-health indicators used by fundamental investors.
Merck & Co., Inc. is a global healthcare leader with operations spanning two core divisions: Pharmaceuticals and Animal Health. The Pharmaceutical segment is dedicated to human health, offering a broad spectrum of medicinal products. These cover crucial therapeutic areas such as oncology, acute hospital care, immunology, neuroscience, virology, cardiovascular conditions, and diabetes.
Is Merck & Co., Inc. stock overvalued or undervalued in 2026?
On the earnings the consensus expects for 2027 ($9.21 per share), Merck & Co., Inc. (MRK) trades at 16.2× earnings (P/E), below the median of the 246 healthcare companies over $2bn in Kaplio's universe. The P/E on the last twelve months (120×) is based on earnings per share of $1.25, far from what is expected; that is why this range uses expected earnings. At the decade median (20.2×) $186 (+25 %); at its sector median (30.4×) $280 (+88 %).
Kaplio overview: Merck & Co., Inc.
Market cap $369B · 52 weeks $82 – $156 (4 % below the high) · P/E 120× · 2027 expected P/E 16.2× · Dividend 2.3 % · 10 years rising · Next earnings February 2, 2027 · expected EPS $1.90 · Closing price, Oct 30 · accounts published Oct 29.
- Valuation: P/E 119.6× (fairly priced).
- Business: ROIC 5 % (weak).
- Balance sheet: Net debt/EBITDA 1.3× (solid).
- Earnings: 7 of 8 (on track).
What would it be worth at its usual multiples?
On those earnings: at the decade median (20.2×) $186 (+25 %); at its sector median (30.4×) $280 (+88 %). Implied price from applying the reference multiples to today's earnings (or book value, or FFO) per share. Not a fair value: it is where the stock would trade at its usual multiples.
P/E calculated by Kaplio with 12-month GAAP earnings; the data provider reports 152.6×.
Note: earnings per share over the last twelve months ($1.25) are far from the consensus for 2027 ($9.21); that is why this range uses expected earnings.
What matters in pharma: 4 of 6 pass
- FCF / Net Income 67.7 %, fails.
- ROIC 5.4 %, fails.
- P/E vs own 10y history 119.6×, info.
- R&D / Revenue 19.3 %, passes.
- 5y EPS growth 21.2 %, passes.
- Gross margin 72.0 %, passes, near the threshold.
- Net debt / EBITDA 1.3×, passes.
Against its peers (reference peers) — Merck & Co., Inc.: P/E 120×; EV/EBITDA 31.9×; ROIC 5.4 %; $369B. Novartis AG (P/E 30.7×; EV/EBITDA 15.4×; ROIC 14.0 %; $304B), AstraZeneca PLC (P/E 28.0×; EV/EBITDA 14.6×; ROIC 12.7 %; $289B), AbbVie Inc. (P/E 83.1×; EV/EBITDA 27.7×; ROIC 13.5 %; $521B).
Expensive or cheap against its last ten years?
P/E at each close: today 120× · median 20.2× · minimum 11.2× · maximum 120× · cheap below 18.3× · expensive above 31.3×. Earnings over the last 12 months are distorted: today's P/E compared with its history is not representative.
Dividend
solid · Yield 2.3 % ($3.27 per share in 2025) · Years raising it 10 · 5-year growth +6 % a year · Free cash flow coverage 1.7× · With $1,000 invested today you'd collect $22.70 a year ($1.89 a month).
Kaplio's reading: Merck & Co., Inc.
Updated on October 31, 2026 · accounts published on October 29, 2026
A heavy research spender whose recent profitability has fallen well short of its record year
Merck trades at a P/E of 119.6 over the last 12 months, 491 % above its ten-year median of 20.2 and the highest of the decade.
- Is Merck expensive or cheap? Its P/E of 119.6 is 491 % above its ten-year median of 20.2 and 293 % above the sector median of 30.4.
- How is the business doing? Operating margin is 16 % over the last 12 months, against a record 36 % in fiscal 2025 and a 21 % decade average.
- How strong is the balance sheet? Net debt was 1.3× EBITDA in fiscal 2025, well under the 2.5× healthy ceiling, and the dividend has risen 10 years running.
- What to expect from the next earnings? Analysts expect EPS of $1.90 on February 2, 2027, after the 2026 EPS consensus slipped 4 % in 30 days to $2.64.
- Does Merck invest enough in R&D and turn profit into cash? R&D took 19.3 % of revenue in fiscal 2025, above the 15 % healthy mark, but only 68 % of net income became free cash flow.
Is Merck expensive or cheap?
Merck trades at a P/E of 119.6 over the last 12 months. It never reached that level in the past decade, when the weekly P/E ranged between 11.2 and 119.6. The sector median is 30.4 across 246 companies. The other multiples are less extreme but still high: EV/EBITDA of 31.9× and a free cash flow yield of 3.7 %. Part of the gap comes from thin trailing profits, with a net margin of 3.6 %. Part comes from the share price, up 77 % in 12 months and only 4 % below its 52-week high of $156.43.
How is the business doing?
Revenue grew just 1.2 % over the last 12 months while EPS rose 8.0 %, so sales are barely moving. Profitability is the weak point. The operating margin of 16.2 % sits below the 2014-2025 average of 20.9 % and far from the 36.2 % of fiscal 2025, the best of those 12 years. Net margin is 3.6 % and ROE 5.1 %. ROIC of 5.4 % is 0.4 points below the sector median of 5.8 %. It cleared 10 % in only 4 of the last 10 fiscal years, with a low of 0.7 % in 2023.
How strong is the balance sheet?
Debt is manageable. Net debt stood at $14.92 per share in fiscal 2025, equal to 10 % of the current share price, and 1.3× EBITDA against a healthy ceiling of 2.5× for healthcare. Over the last 12 months debt to equity is 1.29 and the current ratio 1.32, and an Altman Z of 3.8 places Merck in the safe zone. A Piotroski score of 4 out of 9 points to mixed recent fundamentals. The dividend yields 2.3 % and has grown for 10 consecutive fiscal years through 2025, with a payout of 45 % of fiscal 2025 earnings.
What to expect from the next earnings?
On October 29, 2026, Merck reported EPS of $2.49 against $2.09 expected, a 19 % beat. It has beaten EPS estimates in 7 of the last 8 quarters. Even so, the 2026 EPS consensus fell 3.6 % in the last 30 days, from $2.74 to $2.64 across 13 analysts, while revenue estimates barely moved. For the quarter due on February 2, 2027, analysts expect EPS of $1.90. Of the 38 analysts covering the company, 26 recommend buying, 11 holding and 1 selling. A strong record of beats sits alongside estimates that are drifting lower.
Does Merck invest enough in R&D and turn profit into cash?
In pharma the research pipeline is the asset the balance sheet does not show, and expiring patents take revenue with them. That is why this sector looks at innovation spending and cash conversion before anything else. Merck passes on research, with R&D at 19.3 % of revenue in fiscal 2025 against a 15 % threshold. Its gross margin of 72.0 % is just above the 70 % mark for branded pharma. EPS grew 21.2 % a year over fiscal 2020-2025, far above the 8 % benchmark. It falls short on cash conversion: free cash flow was 67.7 % of net income against a 90 % threshold, and ROIC is 5.4 % against 12 %.
How this was prepared: the data comes from companies' official filings, collected by a professional provider, and from Kaplio's analysis engine (trailing-12-month ratios, 10 years of history and sector medians computed across US-listed companies). The text is written from that data alone, every figure is checked against it before publication, and it is reviewed when the company reports results. This is not investment advice.
Investor methods verdict
Would Buffett approve Merck & Co. today?
The Buffett Method would wait for a better price for Merck & Co.: it yields 4.5% before tax; it asks for 10%. Business quality: 81 out of 100 (price not included). Kaplio assessment with data from the week of 2026-10-26; not investment advice.
Would Peter Lynch approve Merck & Co. today?
The Lynch Method would wait for a better price for Merck & Co.: P/E 119.6 with 21% growth; it asks that the P/E not exceed growth. Business quality: 74 out of 100 (price not included). Lynch classifies it as a stalwart. Kaplio assessment with data from the week of 2026-10-26; not investment advice.
Profitability
| Return on Equity | 5.10% |
| Return on Invested Capital | 5.36% |
| Return on Assets | 1.89% |
| Gross Margin | 76.95% |
| Operating Margin | 16.24% |
| Net Margin | 3.64% |
Financial Health
| Debt / Equity | 1.29 |
| Current Ratio | 1.32 |
| Piotroski F-Score | 4 |
| Altman Z-Score | 3.80 |
Compare it with
Price Performance
| 1 month | +3.62% |
| 3 months | +17.07% |
| Year-to-date | +42.05% |
| 1 year | +73.90% |
| 3 years | +45.38% |
| 5 years | +67.96% |
| 10 years | +168.39% |
Dividend History
Paid in the last 12 months: $3.4000 per share in 4 payments.
| Date | Amount |
|---|---|
| 2026-09-15 | $0.8500 |
| 2026-06-15 | $0.8500 |
| 2026-03-16 | $0.8500 |
| 2025-12-15 | $0.8500 |
| 2025-09-15 | $0.8100 |
| 2025-06-16 | $0.8100 |
| 2025-03-17 | $0.8100 |
| 2024-12-16 | $0.8100 |
| 2024-09-16 | $0.7700 |
| 2024-06-17 | $0.7700 |
Amounts adjusted for stock splits.
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Explore sector: Healthcare · Drug Manufacturers - General
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