Merck & Co., Inc. (NYSE:MRK) February 28, 2015

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Implied Price
UNDERVALUED
52.49 96.24
A Price as of Close Feb 27 58.54 USD
B CapitalCube Median Implied Price 94.46 USD * CapitalCube Price is over trading range * CapitalCube Price is below trading range
CapitalCube Estimate Range 92.69 - 96.24 USD NA
52 Week Range 52.49 - 63.62 USD
Fundamental Score
 0  100
A Fundamental Score (MRK) 55
B Fundamental Score(Peer Median) 50
Analysis
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Fundamental Analysis

Drivers of Margin The company's relatively high pre-tax margin suggests tight control on operating costs versus peers.

The company's relatively high pre-tax margin suggests tight control on operating costs versus peers.

Growth Expectations While MRK-US's revenues growth in recent years has been around the peer median, the stock's below peer median PE ratio suggests that the market likely sees the company's long-term growth prospects to be fading.

While MRK-US's revenues growth in recent years has been around the peer median, the stock's below peer median PE ratio suggests that the market likely sees the company's long-term growth prospects to be fading.

Operations Diagnostic MRK-US has relatively high profit margins while operating with median asset turns.

MRK-US has relatively high profit margins while operating with median asset turns.

Sustainability of Returns Over the last five years, MRK-US's return on assets has improved from below median to better than the median among its peers, suggesting that the company has improved its relative operations markedly. Improving

Improving: Companies whose Return on Assets (relative to the peer median) have outperformed over the last year but underperformed over the last 5 years (on average). For financials and insurance companies, we use Return on Equity.
Over the last five years, MRK-US's return on assets has improved from below median to better than the median among its peers, suggesting that the company has improved its relative operations markedly.

Earnings Leverage Changes in annual earnings (relative to peers) are better than the change in its revenues (relative to peers), implying the company is focused more on earnings. Earnings Focus

Earnings Focus: Companies where the yearly Revenue Growth is below peer median while Net Income Growth is above peer median suggesting that the company is focused on earnings.
Changes in annual earnings (relative to peers) are better than the change in its revenues (relative to peers), implying the company is focused more on earnings.

Leverage & Liquidity

Relative Valuation

Valuation Drivers

Likely Corporate Actions

Dividend Action

Equity Action

The company's current share price is not sufficiently lower than its 52-week high (currently about 7.98% below) and does not justify a share buyback as the best use of cash at this time.

M&A Action

Dividend Quality

Dividend

MRK-US did not pay a cash dividend to the common stock over the last twelve months prior to December 31, 2014.

Accounting Red Flags

Accounting Quality

Management of Reserves

Material Categories

Characteristics
Key Valuation Items

Price to Book (P/B)

Price to Earnings (P/E)

14.00

Price to Sales

3.96

Price / EBITDA

12.19

Price to Assets

Price / FCF

EV / EBITDA

EV / FCF

Dividend Yield

3.02

PEG Ratio

0.08
Profitability

Gross Margin

73.95

EBIT Margin

32.45

Net Margin

28.25

FCF Margin

Operating Margin

32.45

Pre-Tax Margin

40.96

ROE

22.78

ROIC

15.93

ROA

11.28
Efficiency

Debt / Equity

Debt / Market

Debt / Book

Debt / EV

Coverage Ratio

Interest Coverage

Cash Days

151.25

Working Cap. Days

154.12

Receivable Days

62.14

Payable Days

19.67

Inventory Days

53.85

Sales / Assets

0.40
Growth

Earnings Growth YOY

170.66

Revenue Growth YOY

-4.28

Oper. CF Growth YOY

EPS Growth YOY

180.82

FCF Growth YOY

Price History

Peers

FA Score

DQ Score

close

52 week range

58.54

52.49

63.62

USD

34.32

27.51

34.97

USD

102.51

90.75

109.49

USD

70.17

56.81

75.10

USD

60.92

46.30

64.44

USD

48.86

43.57

57.42

USD

47.42

41.25

56.60

USD

271.04

259.30

320.50

USD

102.40

80.64

103.50

USD

47.37

36.65

47.88

USD

Company Profile

Merck & Co., Inc. provides various health solutions through its prescription medicines, vaccines, biologic therapies, animal health, and consumer care products worldwide. It is a global research-driven pharmaceutical company that discovers, develops, manufactures and markets vaccines and medicines to address unmet medical needs. The company's products cover a broad range of areas, including heart and respiratory health, infectious diseases, sun care and women's health. It provides various health solutions through its prescription medicines, vaccines, biologic therapies, animal health, and consumer care products. The company operates its business through four operating segments: Pharmaceutical, Animal Health, Consumer Care and Alliances. The Pharmaceutical segment includes human health pharmaceutical and vaccine products marketed either directly by the company or through joint ventures. Its human health pharmaceutical products consist of therapeutic and preventive agents, generally sold by prescription, for the treatment of human disorders. The company sells these products primarily to drug wholesalers and retailers, hospitals, government agencies and managed health care providers, such as health maintenance organizations, pharmacy benefit managers and other institutions. Its vaccine products consist of preventive pediatric, adolescent and adult vaccines, primarily administered at physician offices. The company sells these vaccines primarily to physicians, wholesalers, physician distributors and government entities. The Animal Health segment discovers, develops, manufactures and markets animal health products, including vaccines, which it sells to veterinarians, distributors and animal producers. The Consumer Care segment develops, manufactures and markets over-the-counter, foot care and sun care products, which are sold through wholesale and retail drug, food chain and mass merchandiser outlets in the United States and Canada. The Alliances segment includes revenue from the company relationship with AstraZeneca LP. The company was founded in 1851 and is headquartered in Whitehouse Station, NJ.

Closing Stock Price

USD 58.54

As of Date

February 27, 2015

One Year Performance

3.31804%

One Month Performance

-6.42583%

Industry Group

Pharmaceuticals: Major

52 wk. Range

USD 52.49 - USD 63.62

Market Cap (Millions)

USD 166890

Total Shares Outstanding

N/A
Latest Filing Dates

Annual

December 31, 2014

Semi Annual

N/A

Quarterly

December 31, 2014

Next Release Date

May 5, 2015

Filing Currency

USD

Listed Exchange

NYSE
Peers


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share page
Bidness Etc
3h
Merck & Co., Inc. Gardasil 9 Gets Green Signal From CDC Committee http://stks.co/e1np5 $MRK
Feb 28 5:40 PM
TalkMarkets
3h
Dow 30 Stock Roundup: Home Depot Beats, Chevron Issues $6B In Bonds $HD $CVX $JPM $MMM $BA $PFE $MRK $DIA http://stks.co/p1bU9
Feb 28 5:20 PM
Stock Comments
20h
$FEZ $MU $MRK $GMCR : CNBC: Fast Money Final Trade: http://stks.co/b1nWg
Feb 28 12:18 AM
1 1
BV Healthcare
1d
$MRK Merck & Co. Inc files Form 10-K (Annual Reports) SEC Filing.. http://stks.co/b1nN4
Feb 27 7:10 PM
Conference Call Transcripts
1d
Merck & Company Just Filed Its Annual Report: Earnings per SharePr... http://stks.co/i1rwj $MRK
Feb 27 7:9 PM
Conference Call Transcripts
1d
Looks like $MRK has been repurchasing shares. The drop in share count ranks them #511 on this buybacks list: http://stks.co/p1bDr
Feb 27 7:9 PM
New Filings
1d
$MRK : New SEC Filing for MRK: Form 10-K, No. 0000310158-15-000005 http://stks.co/i1rwi
Feb 27 7:9 PM
Doc
1d
@Renatta @Fr0van @kjepeneter @RPTL @2 @10 $IBIO Great article.http://www.nih.gov/news/health/feb2015/niaid-27.htm. Add $MRK $ZTS from here
Feb 27 6:39 PM
2069
TheStreet
1d
Dow Jones (DJIA) Today: Merck (MRK) Lower $MRK http://stks.co/i1rua
Feb 27 6:14 PM
Tom Lydon
1d
Just How Different are These Healthcare ETFs? http://stks.co/t1b5u $XLV $FXH $PFE $JNJ $MRK
Feb 27 5:33 PM
1
Eric
2d
$MRK -- long-- target 61-64 http://stks.co/a1n8k
Feb 27 1:56 AM
StockSpotter.com
2d
Bullish setups for Fri. include $MRK $MS - see list at: http://stks.co/t1alo http://stks.co/j1rlT
Feb 27 1:20 AM
1
Finances Stock releases
2d
$MRK Merck's 9-Valent HPV Vaccine, GARDASIL(R)9, Recommended by CDC's Advisory Committee on Immunization Practices http://stks.co/p1afV
Feb 26 8:19 PM
S D
2d
Biotech on fire but $BIOC taking a breather down a big -21% mid-day $BIB $IBB $EYES $TCON $GILD $MRK $CEMP $BLUE $KITE $OVAS $JUNO $ICPT
Feb 26 6:16 PM
Conference Call Transcripts
2d
One of the bigger recent insider buys was yesterday's $4,945,939 purchase of $MRK , according to this list http://stks.co/g1rE1
Feb 26 6:15 PM
msilcpom
2d
$MRK Positive results from technical and fundamental analysis, the short term target of 71.25. http://stks.co/p1aWM
Feb 26 3:58 PM
Mike B
2d
@studatnu2002 @pnross25 Not by much... $GILD has exclusive sales in many countries including India. $MRK will have little impact on $GILD
Feb 26 3:56 PM
27
TheStreet
2d
Dow Jones (DJIA) Today: Merck (MRK) Leads The Day Higher, Intel (INTC) Lags $MRK http://stks.co/f1rLa
Feb 26 3:18 PM
1
Jason
2d
$MRK Tights Its Shoes To Present New Data of Cardiovascular Medicines- $SPG , $NTT http://stks.co/f1rKh
Feb 26 2:54 PM
iBillionaire
2d
Billionaire Investors Are Piling into These 14 Dividend Stocks http://stks.co/e1mjl $AEO $CAT $ETR $FCX $GM $KMB $KRFT $MRK $NOV $NRZ $PG
Feb 26 1:12 PM
1
Jason
3d
Heavy News Day For Several Biotech Stocks http://stks.co/q1Zl4 $MAYNF $PFE $MYGN $PETX $NVS $JAZZ $ABBV $MRK
Feb 25 8:42 PM
Jason
3d
Heavy News Day For Several #Biotech Stocks $ABBV $JAZZ $MAYNF $JAZZ $MYGN $PETX $PFE $MRK http://stks.co/q1Zkl
Feb 25 8:34 PM
MaxInvestor
3d
$PFE massive move up coming courtesy of $5B share buyback. $MRK $LLY $NVS $OPK $AMGN $IBB
Feb 25 8:5 PM
1
Happy Le
3d
"@WorldsWorstTrader Barron's - 8 Undervalued Key Antibiotics Players (Guggenheim) $ACT $TTPH $MDCO $CEMP $PRTK $MRK $AKAO $THRX
Feb 25 7:32 PM
Rich Man Poor Man
3d
Barron's - 8 Undervalued Key Antibiotics Players (Guggenheim) $ACT $TTPH $MDCO $CEMP $PRTK $MRK $AKAO $THRX have underrated sales potential
Feb 25 7:24 PM
BigBuller
3d
Pic in reply. RT @TomSilver39 $GILD $ABBV $MRK $ICPT Rbc"Experts:HCV vol. opening long-term, ABBV gets its share..ICPT drug could be big...
Feb 25 5:39 PM
9 1
Conference Call Transcripts
3d
Merck & Company's EVP & Pres-Global Human Health just picked up 22,198 shares http://stks.co/g1qUi $MRK
Feb 25 4:30 PM
Insider Trades
3d
$MRK : New Insider Transaction on MRK by EVP & Pres-Global Human Health Schechter Adam H: http://stks.co/c1mF1
Feb 25 4:28 PM
Conference Call Transcripts
3d
Merck & Company's Sr.V-P & Chief Comuns Officer just picked up 2,462 shares http://stks.co/g1qUX $MRK
Feb 25 4:27 PM
Conference Call Transcripts
3d
Chairman of Merck & Company just picked up 84,836 shares http://stks.co/j1qmK $MRK
Feb 25 4:27 PM
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Closing Stock Price

USD 58.54

As of Date

February 27, 2015

One Year Performance

3.32%

One Month Performance

-6.43%

Industry Group

Pharmaceuticals: Major

52 wk. Range

USD 52.49 - USD 63.62

Market Cap (Millions)

USD 166,890

Total Shares Outstanding (Millions)

Latest Filing Dates

Annual

December 31, 2014

Semi Annual

N/A

Quarterly

December 31, 2014

Next Release Date

May 5, 2015

Filing Currency

USD

Listed Exchange

NYSE
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