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Merck & Co Inc MRK

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Morningstar’s Analysis

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1-Star Price

PREMIUM

5-Star Price

PREMIUM

Economic Moat

PREMIUM

Capital Allocation

PREMIUM

Merck Posts Steady Q4; CEO Transition Signals Continuity of Strategy

Damien Conover, CFA Sector Director

Analyst Note

| Damien Conover, CFA |

Merck reported fourth-quarter results largely in line with our expectations, and we don’t expect any major changes to our fair value estimate. We continue to view the company as undervalued with the market not fully appreciating the firm’s growth potential, largely driven by cancer drug Keytruda in new indications, which should add high-margin sales and expand profit margins.

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Company Profile

Business Description

Merck makes pharmaceutical products to treat several conditions in a number of therapeutic areas, including cardiometabolic disease, cancer, and infections. Within cancer, the firm's immuno-oncology platform is growing as a major contributor to overall sales. The company also has a substantial vaccine business, with treatments to prevent hepatitis B and pediatric diseases as well as HPV and shingles. Additionally, Merck sells animal health-related drugs. From a geographical perspective, close to 40% of the firm's sales are generated in the United States.

Contact
2000 Galloping Hill Road
Kenilworth, NJ, 07033
T +1 908 740-4000
Sector Healthcare
Industry Drug Manufacturers - General
Most Recent Earnings Dec 31, 2020
Fiscal Year End Dec 31, 2021
Stock Type High Yield
Employees 74,000

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