MRK Relative Valuation
MRK's fair value is calculated using relative valuation, based on historical P/E and P/S ranges and their premiums/discounts relative to a competitor average, adjusted by weights. If the market price exceeds this fair value range, MRK is overvalued; if below, it's undervalued.
Historical Valuation
Merck & Co Inc (MRK) is now in the Fair zone, suggesting that its current forward PE ratio of 12.32 is considered Fairly compared with the five-year average of 16.85. The fair price of Merck & Co Inc (MRK) is between 61.94 to 270.68 according to relative valuation methord.
Relative Value
Fair Zone
61.94-270.68
Current Price：108.60
Fair
12.32
PE
1Y
3Y
5Y
8.86
EV/EBITDA
Merck & Co Inc. (MRK) has a current EV/EBITDA of 8.86. The 5-year average EV/EBITDA is 11.53. The thresholds are as follows: Strongly Undervalued below 1.44, Undervalued between 1.44 and 6.49, Fairly Valued between 16.57 and 6.49, Overvalued between 16.57 and 21.62, and Strongly Overvalued above 21.62. The current Forward EV/EBITDA of 8.86 falls within the Historic Trend Line -Fairly Valued range.
10.46
EV/EBIT
Merck & Co Inc. (MRK) has a current EV/EBIT of 10.46. The 5-year average EV/EBIT is 14.00. The thresholds are as follows: Strongly Undervalued below -3.04, Undervalued between -3.04 and 5.48, Fairly Valued between 22.52 and 5.48, Overvalued between 22.52 and 31.03, and Strongly Overvalued above 31.03. The current Forward EV/EBIT of 10.46 falls within the Historic Trend Line -Fairly Valued range.
3.95
PS
Merck & Co Inc. (MRK) has a current PS of 3.95. The 5-year average PS is 4.07. The thresholds are as follows: Strongly Undervalued below 2.89, Undervalued between 2.89 and 3.48, Fairly Valued between 4.66 and 3.48, Overvalued between 4.66 and 5.25, and Strongly Overvalued above 5.25. The current Forward PS of 3.95 falls within the Historic Trend Line -Fairly Valued range.
11.02
P/OCF
Merck & Co Inc. (MRK) has a current P/OCF of 11.02. The 5-year average P/OCF is 12.41. The thresholds are as follows: Strongly Undervalued below 6.13, Undervalued between 6.13 and 9.27, Fairly Valued between 15.55 and 9.27, Overvalued between 15.55 and 18.69, and Strongly Overvalued above 18.69. The current Forward P/OCF of 11.02 falls within the Historic Trend Line -Fairly Valued range.
12.38
P/FCF
Merck & Co Inc. (MRK) has a current P/FCF of 12.38. The 5-year average P/FCF is 14.98. The thresholds are as follows: Strongly Undervalued below 5.07, Undervalued between 5.07 and 10.03, Fairly Valued between 19.94 and 10.03, Overvalued between 19.94 and 24.90, and Strongly Overvalued above 24.90. The current Forward P/FCF of 12.38 falls within the Historic Trend Line -Fairly Valued range.
Merck & Co Inc (MRK) has a current Price-to-Book (P/B) ratio of 5.11. Compared to its 3-year average P/B ratio of 6.07 , the current P/B ratio is approximately -15.88% higher. Relative to its 5-year average P/B ratio of 6.04, the current P/B ratio is about -15.40% higher. Merck & Co Inc (MRK) has a Forward Free Cash Flow (FCF) yield of approximately 4.94%. Compared to its 3-year average FCF yield of 4.96%, the current FCF yield is approximately -0.38% lower. Relative to its 5-year average FCF yield of 4.84% , the current FCF yield is about 2.05% lower.
5.11
P/B
Median3y
6.07
Median5y
6.04
4.94
FCF Yield
Median3y
4.96
Median5y
4.84
Competitors Valuation Multiple
The average P/S ratio for MRK's competitors is 4.32, providing a benchmark for relative valuation. Merck & Co Inc Corp (MRK) exhibits a P/S ratio of 3.95, which is -8.58% above the industry average. Given its robust revenue growth of 3.72%, this premium appears unsustainable.
Performance Decomposition
1Y
3Y
5Y
Market capitalization of MRK increased by 10.17% over the past 1 year. The primary factor behind the change was an increase in Margin Expansion from 18.98 to 33.50.
The secondary factor is the Revenue Growth, contributed 3.72%to the performance.
Overall, the performance of MRK in the past 1 year is driven by Margin Expansion. Which is more sustainable.
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Frequently Asked Questions
Is Merck & Co Inc (MRK) currently overvalued or undervalued?
Merck & Co Inc (MRK) is now in the Fair zone, suggesting that its current forward PE ratio of 12.32 is considered Fairly compared with the five-year average of 16.85. The fair price of Merck & Co Inc (MRK) is between 61.94 to 270.68 according to relative valuation methord.
What is Merck & Co Inc (MRK) fair value?
MRK's fair value is calculated using relative valuation, based on historical P/E and P/S ranges and their premiums/discounts relative to a competitor average , adjusted by weights. The fair price of Merck & Co Inc (MRK) is between 61.94 to 270.68 according to relative valuation methord.
How does MRK's valuation metrics compare to the industry average?
The average P/S ratio for MRK's competitors is 4.32, providing a benchmark for relative valuation. Merck & Co Inc Corp (MRK) exhibits a P/S ratio of 3.95, which is -8.58% above the industry average. Given its robust revenue growth of 3.72%, this premium appears unsustainable.
What is the current P/B ratio for Merck & Co Inc (MRK) as of Jan 07 2026?
As of Jan 07 2026, Merck & Co Inc (MRK) has a P/B ratio of 5.11. This indicates that the market values MRK at 5.11 times its book value.
What is the current FCF Yield for Merck & Co Inc (MRK) as of Jan 07 2026?
As of Jan 07 2026, Merck & Co Inc (MRK) has a FCF Yield of 4.94%. This means that for every dollar of Merck & Co Inc’s market capitalization, the company generates 4.94 cents in free cash flow.
What is the current Forward P/E ratio for Merck & Co Inc (MRK) as of Jan 07 2026?
As of Jan 07 2026, Merck & Co Inc (MRK) has a Forward P/E ratio of 12.32. This means the market is willing to pay $12.32 for every dollar of Merck & Co Inc’s expected earnings over the next 12 months.
What is the current Forward P/S ratio for Merck & Co Inc (MRK) as of Jan 07 2026?
As of Jan 07 2026, Merck & Co Inc (MRK) has a Forward P/S ratio of 3.95. This means the market is valuing MRK at $3.95 for every dollar of expected revenue over the next 12 months.