Merck & Company logged a -1.7% change during today's evening session, and is now trading at a price of $103.88 per share.
Over the last year, Merck & Company logged a -5.0% change, with its stock price reaching a high of $119.65 and a low of $99.14. Over the same period, the stock underperformed the S&P 500 index by -22.0%. As of April 2023, the company's 50-day average price was $103.02. Merck & Co., Inc. operates as a healthcare company worldwide. Based in Rahway, NJ, the large-cap Health Care company has 67,000 full time employees. Merck & Company has offered a 2.7% dividend yield over the last 12 months.
Growing Revenues With Increasing Reinvestment in the Business:
| 2018 | 2019 | 2020 | 2021 | 2022 | 2023 | |
|---|---|---|---|---|---|---|
| Revenue (MM) | $42,294 | $39,121 | $41,518 | $48,704 | $59,283 | $59,314 |
| Revenue Growth | n/a | -7.5% | 6.13% | 17.31% | 21.72% | 0.05% |
| Gross Margins | 68% | 69% | 67% | 72% | 71% | 73% |
| Operating Margins | 21% | 18% | 14% | 28% | 28% | 24% |
| Net Margins | 15% | 25% | 17% | 27% | 25% | 24% |
| Net Income (MM) | $6,220 | $9,843 | $7,082 | $13,049 | $14,526 | $14,519 |
| Net Interest Expense (MM) | $772 | $893 | $890 | $1,341 | $962 | $1,071 |
| Depreciation & Amort. (MM) | $4,519 | $3,652 | $1,669 | $1,578 | $1,824 | $1,756 |
| Earnings Per Share | $2.32 | $3.81 | $2.78 | $5.14 | $5.71 | $1.8 |
| EPS Growth | n/a | 64.22% | -27.03% | 84.89% | 11.09% | -68.48% |
| Diluted Shares (MM) | 2,679 | 2,580 | 2,541 | 2,538 | 2,542 | 2,559 |
| Free Cash Flow (MM) | $8,307 | $10,071 | $5,824 | $8,674 | $14,707 | $14,848 |
| Capital Expenditures (MM) | $2,615 | $3,369 | $4,429 | $4,448 | $4,388 | $4,247 |
| Current Ratio | 1.17 | 1.24 | 1.02 | 1.27 | 1.47 | 1.38 |
| Long Term Debt (MM) | $19,806 | $22,736 | $25,360 | $30,690 | $28,745 | $33,972 |
| Net Debt / EBITDA | 1.3 | 1.54 | 3.15 | 1.73 | 1.09 | 1.73 |
Merck & Company benefits from growing revenues and increasing reinvestment in the business, a pattern of improving cash flows, and wider gross margins than its peer group. The company's financial statements show decent operating margins with a stable trend and healthy leverage. However, the firm has declining EPS growth.
Merck & Company's P/B and P/E Ratios Are Higher Than Average:
Merck & Company has a trailing twelve month P/E ratio of 57.2, compared to an average of 30.21 for the Health Care sector. Based on its EPS guidance of $8.53, the company has a forward P/E ratio of 12.1. The company doesn't issue forward earnings guidance, and the compound average growth rate of its last 6 years of reported EPS is -4.1%. On this basis, the company's PEG ratio is -13.82, which indicates that its shares are overpriced. Furthermore, Merck & Company is likely overvalued compared to the book value of its equity, since its P/B ratio of 6.39 is higher than the sector average of 4.08. The company's shares are currently trading 304.4% above their Graham number. Overall, Merck & Company's lofty valuation in terms of earnings and assets is to some extent attenuated by its strong cash flow trend and reasonable levels of debt.
Merck & Company Has an Average Rating of Buy:
The 26 analysts following Merck & Company have set target prices ranging from $103.0 to $135.0 per share, for an average of $124.9 with a buy rating. As of April 2023, the company is trading -17.5% away from its average target price, indicating that there is an analyst consensus of some upside potential.
Merck & Company has a very low short interest because 0.7% of the company's shares are sold short. Institutions own 77.6% of the company's shares, and the insider ownership rate stands at 0.09%, suggesting a small amount of insider investors. The largest shareholder is Vanguard Group Inc, whose 10% stake in the company is worth $25,298,988,444.
