MRK
Merck & Co., Inc.
$149.92
Stable Earnings Power
80%
P/Adj-EPS × Normalized Multiple
Moderate
·
Conviction
Overvalued
Trading 37.8% above fair value
You pay
$149.92
Bear
$93.28
Fair
$108.82
Bull
$124.37
Bear
$93.28
-37.8%
$7.28 × 13x P/E
Fair
$108.82
-27.4%
$7.28 × 15x P/E
Bull
$124.37
-17.0%
$7.28 × 17x P/E
Adjust Assumptions
14.9x
7.28$
Key Value Driver
Normalized P/E multiple (15x base case)
Implied Market Multiple
20.6x
Analyst Consensus (External Reference)
Never blended into the bear/base/bull estimates above.
Average Target (38 analysts)
$158.22
Divergence from AlphaVal
31%
Summary
Applying a 15x P/E to adjusted EPS of $7.28, the base-case value is $108.82 per share. DDM cross-check: $94.76.
Warnings
Wall Street's average price target is $158.22 (from 38 analysts). Our estimate is 31% below the consensus -- consider that gap carefully.
Key Risks
- Growth DCF inappropriate — terminal value assumptions dominate
- EV/EBITDA misleading for regulated businesses where capex is mandated
- Regulatory risk is a fat tail not visible in normal multiples