Is Merck & Co., Inc. overvalued or undervalued?

As of 24 April 2025, the valuation grade for Merck & Co., Inc. has moved from very attractive to attractive. Based on the analysis, the company appears to be fairly valued at this time. Key ratios include a P/E ratio of 15, an EV to EBITDA of 11.50, and a PEG ratio of 0.03, which indicates strong growth potential relative to its price.
In comparison to peers, Merck's P/E ratio of 14.42 is notably lower than Eli Lilly & Co.'s 48.73, which is categorized as very expensive, and Johnson & Johnson's 22.46, which is very attractive. Additionally, Merck's dividend yield stands at 5.70%, further enhancing its appeal. Recent stock performance shows that Merck has underperformed the S&P 500 over the past year, with a return of -38.68% compared to the index's 10.26%, reinforcing the notion that the stock may be undervalued relative to its fundamentals.