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

As of 17 October 2025, the valuation grade for Merck & Co., Inc. moved from fair to attractive, indicating a more favorable outlook. The company appears undervalued based on its current metrics, with a P/E ratio of 15, a PEG ratio of 0.03, and an EV to EBITDA of 11.50. In comparison to peers, Eli Lilly & Co. has a significantly higher P/E ratio of 40.89, while Pfizer Inc. shows a lower P/E at 14.49, suggesting that Merck is positioned competitively within the industry.
Despite recent stock performance lagging behind the S&P 500, with a year-to-date return of -14.77% compared to the index's 13.30%, the strong fundamentals reflected in a ROE of 40.02% and a dividend yield of 5.70% support the case for Merck being undervalued.