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Merck & Co.: A Pharma Titan At A Discount
Summary
- Merck & Co. is currently down ≈18% YTD, a result of the 2028 patent cliff, weak demand for Gardasil in China, and IRA price controls.
- Despite these headwinds, my DCF Model shows that at its current market price, MRK is as much as 23% undervalued.
- Underlying fundamentals are still strong, with great margins, heavy R&D investing, and a plan to aggressively expand by CapEx spending totaling $20 billion from 2024 to 2028.
- The factors lead me to hold a short-term bullish view on the stock, and believe that at current market prices, MRK is a buy.
Hey! I'm Arav, a second-year student at Northeastern University with a passion for Finance. I fell in love with the realm of investment at the young age of 14, and since then, I have dedicated myself to a constant journey of deepening my knowledge of Finance and exploring my interest in equities. I'm eager to learn about all domains of Finance and eventually become an expert in the field.
Analyst’s Disclosure:I/we have no stock, option or similar derivative position in any of the companies mentioned, but may initiate a beneficial Long position through a purchase of the stock, or the purchase of call options or similar derivatives in MRK over the next 72 hours. I wrote this article myself, and it expresses my own opinions. I am not receiving compensation for it. I have no business relationship with any company whose stock is mentioned in this article.
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