Drug Manufacturers - General · NYSE
Current Price
$111.02
Intrinsic Value
Use the calculator below to estimate
Run a full DCF analysis on Merck & Co., Inc. with auto-filled fundamentals, adjustable assumptions, and sensitivity heatmap.
Open DCF Calculator for MRKMerck & 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.
ROIC (TTM)
20.8%
ROE (TTM)
36.2%
FCF Yield
4.51%
Based on trailing twelve-month data, MRK shows a free cash flow per share of N/A and a ROIC of 20.8%, key inputs for stock valuation using the DCF method. The P/FCF ratio of N/A and FCF yield of 4.51% are important context metrics when evaluating MRK's stock valuation relative to peers.
The intrinsic value of MRK depends on assumptions about future growth rate, discount rate (WACC), and terminal value. A DCF model discounts projected free cash flows back to present value — small changes in WACC can shift the estimate by 20% or more, which is why sensitivity analysis is essential.
Whether MRK is undervalued depends on comparing the DCF-derived intrinsic value to the current market price of $111.02. A positive margin of safety (intrinsic value above market price) suggests potential undervaluation, but the degree of confidence depends on the reliability of your growth and discount rate assumptions.
To perform a DCF valuation on Merck & Co., Inc.: (1) Start with the trailing free cash flow per share as the base, (2) project future FCF growth over 5-10 years based on Drug Manufacturers - General industry trends and company fundamentals, (3) apply a discount rate (WACC) reflecting MRK's risk profile, and (4) add a terminal value for cash flows beyond the projection period.
DCF (Discounted Cash Flow) estimates what a company is worth today based on its future cash generation. For Merck & Co., Inc., this means projecting how much free cash flow the Drug Manufacturers - General will produce over the next 5-10 years, then discounting those amounts to today's dollars. MRK's ROIC of 20.8% indicates strong capital efficiency, which supports higher growth assumptions in the DCF model.
WACC (Weighted Average Cost of Capital) is the discount rate in a DCF model — it reflects the minimum return investors require. For MRK, the capital structure and equity risk premium determine WACC. A 1% increase in WACC typically reduces the intrinsic value by 10-15%.
