Market Pulse59Neutral

Merck & Co., Inc.Opportunity Rank #47(MRK) Intrinsic Value & DCF Analysis (2026)

Sector: Healthcare

Current Price

$112.30

Last updated: May 08, 2026

Price vs Intrinsic Value

$112.30
Price
$154.15
Intrinsic Value
Undervalued by 37%MOS: $123.32

Fundamental Score

65/100
Bullish

Weighted across 6 signals

Narrative Score

80/100
Strong

No change vs previous

Trend Score

44/100
Weak

As of 2026-05-08

The intrinsic value of Merck & Co., Inc. (MRK) is estimated at $154.15 per share based on a 10-year discounted cash flow (DCF) analysis. At the current price of $112.30, the stock appears undervalued relative to its projected cash flow fundamentals. This estimate assumes a 3.87% long-term growth rate and an 8.00% discount rate (calculated: 6.89%), reflecting expected future free cash flow and cost of capital.

The intrinsic value of Merck & Co., Inc. (MRK) is estimated at $154.15 per share based on a 10-year discounted cash flow (DCF) analysis. At the current price of $112.30, the stock appears undervalued relative to its projected cash flow fundamentals. This estimate assumes a 3.87% long-term growth rate and an 8.00% discount rate (calculated: 6.89%), reflecting expected future free cash flow and cost of capital.

Valuation Details

$154.15
▲ 37.27% upside
20% margin of safety: $123.32
Years: 10Growth Rate: 3.87%
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Capital Efficiency

Average Quarterly ROIC
5.1%
Cost of Capital (estimated)10%
Value StatusUnderperforming Capital

The company is earning below its required return. This may indicate inefficient use of capital or excess cash that isn't being reinvested.

Complete historical ROIC is available with
.

Fundamental Details

65/100
BullishWeighted across 6 signals
DCF Discount
37.3% discount to price
100
FCF Yield
7.8% trailing FCF yield
100
ROIC vs WACC
ROIC 5.1% vs WACC 10.0% (0.5x)
26
Net Debt / FCF
2.0x net debt to FCF
30
Buybacks
Share count shrinking
80
FCF CAGR (5Y)
8.1% 5Y FCF CAGR
65
Strengths: DCF Discount, FCF Yield. Concerns: ROIC vs WACC, Net Debt / FCF.

Narrative Details

80/100
Strong
Vs 6-Month Baseline:Above Avg (62nd pct)Weighted across 5 recent drivers
Trend: StableConfidence: 97%Updated: 15h ago
Sources: 179 (172 News · 7 Analyst)
Drivers(last 30 days)
102 news sentiment+2.9
61 regulatory scrutiny+0.9
5 earnings beat+0.5
4 legal risk+0.2
7 analyst reiterations0.0

Trend Details

44/100
WeakAs of 2026-05-08311 daily bars used
3M Relative Strength vs SPY-15.5%
6M Relative Strength vs SPY+23.1%
Distance from 52-Week High-10.1%
Price vs 21 EMA37 · -2.1%
Price vs 50 EMA35 · -3.1%
21 EMA vs 50 EMA42 · -1.0%
3M RS vs SPY7 · -15.5%
6M RS vs SPY93 · +23.1%
Distance from 52W High80 · -10.1%

Investment Coach

Updating... 1d ago
BUYConfidence: 61%
Thesis
Merck & Co., Inc. is undervalued with an estimated fair value 40.1% above its current price, supported by constructive fundamentals and a strong narrative score. Despite trailing returns relative to its cost of capital, the company's free cash flow yield and buyback activity indicate potential for value creation.
Key Risk
The key risk is the negative spread between Merck's ROIC and WACC, which may limit sustainable value generation if not improved.
Signals To Watch
  • Monitor whether valuation discount remains above 10%.
  • Track ROIC vs WACC spread for sustained improvement.
  • Follow narrative trend for meaningful shifts in the score direction.
Ask the Coach - Available with
Historical Growth Rates
Free Cash Flow- - -Trend CAGR: 3.87%5 Year CAGR: 3.15%

Free Cash Flow (in millions)

TTM20252024202320222021202020192018201720162015201420132012201120102009200820072006
$21,665$20,584$24,840$16,869$23,483$18,557$14,682$16,913$13,537$8,335$11,990$13,704$10,177$13,202$11,976$14,106$12,500$4,853$7,870$8,010$7,745

How Intrinziq Estimates Fair Value

Intrinziq estimates Merck & Co., Inc.'s intrinsic value using a discounted cash flow (DCF) model based on free cash flow trends and a market-based discount rate. The model projects future cash flows over ten years and discounts them using a market return assumption to estimate fair value.

Merck & Co., Inc.Healthcare

Merck & 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.