Merck & Co., Inc. (MRK) DCF Valuation
Transparent DCF models put Merck & Co., Inc. (MRK)'s fair value in a range of $75.92 – $213.59 — the low end is TGM's conservative base case (5% FCF growth, 10% discount), the high end the analyst consensus (FMP). Today's price of $119.60 sits within that range — roughly fairly valued on these assumptions.
Reverse DCF: at today's $119.60, the market is pricing in roughly +10.4%/yr free-cash-flow growth over the next decade (at a 10% required return) — versus its actual 5-year FCF CAGR of +15.7%. The price assumes a slowdown from its track record — a potential value signal if growth holds.
Current Price
$119.60
Fair-Value Range
$75.92 – $213.59
Market-Implied Growth
+10.4%/yr
vs +15.7% 5Y actual
MRK DCF Fair Value Calculator
Edit the assumptions to see how they change the estimated fair value. Illustrative model — not investment advice. Defaults to a conservative base case; the analyst (FMP) DCF, where available, is shown as a reference below.
Base inputs: FCF $13.6B · 2.47B shares · net debt $35.1B
Estimated Fair Value
$75.92
-36.5% vs $119.60
Sensitivity — fair value by discount rate × terminal growth
How the estimated fair value shifts with the discount rate (WACC) and terminal growth, holding your 5.0%/yr FCF growth and 10-year horizon fixed. Green = above today's $119.60; red = below. Your current case is outlined.
| WACC ↓ / Terminal → | 1.50% | 2.00% | 2.50% | 3.00% | 3.50% |
|---|---|---|---|---|---|
| 8.0% | $97.80 | $104 | $110 | $118 | $128 |
| 9.0% | $82.00 | $85.93 | $90.46 | $95.74 | $102 |
| 10.0% | $69.97 | $72.76 | $75.92 | $79.54 | $83.71 |
| 11.0% | $60.50 | $62.55 | $64.84 | $67.41 | $70.33 |
| 12.0% | $52.88 | $54.42 | $56.12 | $58.01 | $60.12 |
About Merck & Co., Inc.
Merck & Co., Inc. is a global healthcare leader with operations spanning two core divisions: Pharmaceuticals and Animal Health. The Pharmaceutical segment is dedicated to human health, offering a broad spectrum of medicinal products. These cover crucial therapeutic areas such as oncology, acute hospital care, immunology, neuroscience, virology, cardiovascular conditions, and diabetes. This division also develops vital preventive vaccines for pediatric, adolescent, and adult populations. Meanwhile, the Animal Health segment focuses on the research, development, manufacturing, and marketing of veterinary medications, vaccines, and comprehensive health management solutions for animals. This division further provides innovative digital products designed for animal identification, traceability, and continuous monitoring. Merck's extensive clientele encompasses drug wholesalers, pharmacies, hospitals, and government agencies. It also serves managed healthcare organizations, including health maintenance organizations (HMOs) and pharmacy benefit managers, as well as various other institutional clients. Additionally, the company supplies products to individual physicians and their distributors, veterinarians, and livestock producers. The organization actively engages in strategic collaborations with companies such as AstraZeneca PLC, Bayer AG, Eisai Co., Ltd., Ridgeback Biotherapeutics, and Gilead Sciences, Inc. These partnerships are specifically aimed at the joint development and commercialization of prolonged-acting therapies for HIV. Established in 1891, Merck & Co., Inc. maintains its corporate headquarters in Kenilworth, New Jersey.
- Sector
- Healthcare
- Industry
- Drug Manufacturers - General
- CEO
- Robert Davis