What is Merck & Co., Inc. (MRK) DCF Fair Value and Intrinsic Value in 2026?

Merck & Co., Inc. (MRK) intrinsic value is calculated using conservative multi-stage Discounted Cash Flow (DCF) models, 5-year free cash flow trajectories, Graham Numbers, and owner earnings multiples. LocalAlpha tracks real-time margin of safety against live market prices.

What is Merck & Co., Inc.'s historical Return on Invested Capital (ROIC) and Moat Rating?

Merck & Co., Inc. operates in the Healthcare sector (Drug Manufacturers - General) with an economic moat rating of WIDE. LocalAlpha tracks 5-year audited quarterly ROIC, operating margin stability, and balance sheet solvency ratios.

What is Merck & Co., Inc.'s financial health rating and Piotroski F-Score?

Merck & Co., Inc.'s balance sheet quality is evaluated using the 9-point Piotroski F-Score, Altman Z-Score solvency model, debt-to-equity ratio, and quick/current liquidity coverage to guard against financial distress.

How does LocalAlpha monitor Merck & Co., Inc. (MRK) for quarterly SEC filing thesis breaks?

LocalAlpha audits Merck & Co., Inc.'s 10-K, 10-Q, and 8-K regulatory filings on SEC EDGAR within 15 minutes of release. If reported metrics breach an investor's custom ROIC floor, operating margin boundary, or qualitative risk criteria, an autonomous breach audit is dispatched immediately.

StocksMRK

MRK

Merck & Company, Inc.Healthcare / Drug Manufacturers - GeneralINTACT

Merck & Co., Inc. operates as a healthcare company worldwide. It offers human health pharmaceutical for various areas under the Keytruda, Keytruda Qlex, Welireg, Gardasil, ProQuad, M-M-R II, Varivax, Vaxneuvance, Capvaxive, RotaTeq, Pneumovax 23, Bridion, Prevymis, Dificid, Zerbaxa, Winrevair, Adempas/ Verquvo, Ohtuvayre, Lagevrio, Isentress/Isentress HD, Delstrigo, Pifeltro, Belsomra, Januvia, and Janumet brands. The company also provides veterinary pharmaceuticals, vaccines and health management solutions and services, such as livestock products under the Nuflor, Bovilis/Vista, Bovilis Cryptium, Banamine, Estrumate, Matrix, Resflor, Zuprevo, Revalor, Safe-Guard, M+Pac, Porcilis, Circumvent, Nobilis/Innovax, Paracox and Coccivac, Exzolt, Slice, Imvixa, Clynav, Aquavac/Norvax, Aquaflor, Flexolt brands; Allflex Livestock Intelligence solutions; and companion animal products under the Bravecto One-Month, Bravecto Injectable/Quantum, Bravecto TriUNO, Bravecto Plus, Sentinel Spectrum, Sentinel Flavor Tabs, Numelvi, Optimmune, Nobivac NXT, GilvetMab, Otomax, Mometamax, Mometamax Ultra, Posatex, Caninsulin/Vetsulin, Panacur, Safeguard, Regumate, Prestige, Scalibor/Exspot, Sure Petcare, and Home Again brands. It has development and commercialization agreement for three of Daiichi Sankyo's deruxtecan ADC candidates; AstraZeneca PLC to co-development and co-commercialize AstraZeneca's Lynparza products for multiple cancer types; licensed to develop, manufacture and commercialize LM-299, a novel investigational PD-1/VEGF bispecific antibody from LaNova; and collaboration agreement with Eisai Co., Ltd., Bayer AG, and Ridgeback Biotherapeutics LP, as well Moderna, Inc. Merck & Co., Inc. has strategic collaboration with Infinimmune, Inc. to discover and develop antibodies against multiple therapeutic targets. The company was founded in 1891 and is headquartered in Rahway, New Jersey.

Share Price

$145.13

52W: $77.58 - $156.92

DCF Fair Value

$97.89

-48.3% Premium

Thesis Hub

P/E (TTM)

117x

ROIC

Operating Margin

-0.2%

FCF Yield

4.2%

Debt / Equity

1.28x

Piotroski Score

8/9

Altman Z-Score

2.98

Market Cap

$358.1B

Price vs. Intrinsic Value Corridor

Overvalued vs DCF ($97.89)

Historical market price overlaid against conservative DCF Fair Value & Benjamin Graham Margin of Safety bands.

Period Return (1Y)

—()

Period Range

$— - $—

DCF Fair Value

$97.89

MOS Buy Target (-25%)

$73.42

Valuation Overlays: DCF Fair Value ($97.89) 25% MOS Buy Target ($73.42) Revised Graham ($18.76) Graham Number ($21.77)

2-Stage Discounted Cash Flow (DCF) Workbench

Conservative intrinsic value model based on owner cash generation over a 10-year investment horizon. Opens with LocalAlpha's baseline assumptions (matching the fair value shown above) — adjust any input to stress-test.

Current Market Price

$145.13

DCF Fair Value

$97.72

-48.5% Premium

Starting Free Cash Flow ($M)$15,172M

$100M$15,172M (Reported)$50,000M

Stage 1 Growth (Years 1-5)5.3%

-5%10% (Target)35%

Stage 2 Growth (Years 6-10)4.5%

0%5%20%

Discount Rate (WACC / Hurdle)9.0%

6%9% (Standard)15% (High Risk)

Terminal Perpetual Growth2.5%

1% (GDP Floor)2.5% (Inflation)4.0%

Net Debt ($M)$46,800M

-$100B CashBalance Sheet+$150B Debt

10-Yr PV of Cash Flows

$124.8B

PV of Terminal Value

$163.0B

Implied Enterprise Value

$287.9B

Implied Equity Value

$241.1B

Year	Yr 1	Yr 2	Yr 3	Yr 4	Yr 5	Yr 6	Yr 7	Yr 8	Yr 9	Yr 10
Projected FCF ($M)	$15,976	$16,823	$17,714	$18,653	$19,642	$20,526	$21,450	$22,415	$23,423	$24,477
Present Value (PV)	$14,657	$14,159	$13,679	$13,214	$12,766	$12,239	$11,734	$11,249	$10,785	$10,340

Benjamin Graham & Buffett Value Models

Classical deep value metrics based on asset backing, normalized earnings power, and owner cash yield.

Graham Number-566.7% Premium

$21.77

Calculated as √(22.5 × EPS × BVPS). The maximum theoretical price a defensive investor should pay based purely on asset book value and current earnings.

EPS: $1.24BVPS: $16.99

Revised Graham Formula-673.6% Premium

$18.76

Formula: V = (EPS × (8.5 + 2g) × 4.4) / Y where g is the conservative 7-10 yr growth rate and Y is AAA Bond Yield.

Growth Rate (g%)

Bond Yield (Y%)

Buffett Owner Earnings4% Yield

$5.84 / share

True distributable cash flow: Net Income + D&A - Maintenance CapEx. Reflects the cash Buffett would extract without hurting unit volume.

Total: $14.4BYield: 4%

Reverse DCF: Market Growth Expectation

FAIR BARRIER

7.8% CAGR (Next 10 Yrs)

At the current price of $145.13, the market is assuming the business will compound Free Cash Flow at 7.8% per year for the next decade with a 9% hurdle rate.

Value Investor Verdict

✓ Low market hurdle: Easy for a wide-moat compounder to beat.

Autonomous Thesis Underwriting

Surveil MRK with Mathematical Margin of Safety Rules

Set non-negotiable floor rules for Merck & Company, Inc.. If a newly filed quarterly 10-Q breaks your ROIC floor, operating margin boundary, or balance sheet leverage rules, receive an autonomous breach audit within 15 minutes.

Buffett Quality

ROIC > 15% • Margin > 15% • D/E < 0.5x

Margin Floor Guard

Current Margin -0.2% • Floor > 10%

Solvency Guard

Altman-Z > 2.6 • Current Ratio > 1.5x

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Frequently Asked Questions: Merck & Company, Inc. (MRK) Intrinsic Valuation

Audited fundamentals, DCF intrinsic value sensitivity, and thesis break detection parameters for Merck & Company, Inc..

Based on institutional multi-stage Discounted Cash Flow (DCF) modeling on audited SEC cash flows, Merck & Company, Inc. has an estimated DCF intrinsic fair value of $97.89 per share compared to its current market price of $145.13. This represents an estimated 48.3% premium over fair value. Additionally, its classic Benjamin Graham Number stands at $21.77.