Merck’s Post-1Q18 Valuation


Nov. 20 2020, Updated 5:32 p.m. ET

Merck’s valuation

In 1Q18, Merck’s revenue grew 6% YoY (year-over-year) to $10.0 billion from $9.4 billion, and its EPS (earning per share) rose to $1.05 from $0.88. In this part, we’ll look at how Merck’s valuation multiples compare.

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Forward price-to-earnings multiples

The above chart shows Merck’s revenue and EPS since 1Q17. PE (price-to-earnings) multiples represent what one share can buy for an equity investor. On May 7, Merck was trading at a forward PE multiple of ~13.1x, while the industry was trading at an average forward PE multiple of 12.3x. Eli Lilly (LLY) and Bristol-Myers Squibb (BMY) both had higher forward PE multiples of 14.6x, while Pfizer (PFE) was trading at a lower forward PE multiple of 11.6x.

Forward enterprise value multiples

On a capital-structure-neutral basis, Merck was trading at a forward EV-to-EBITDA (enterprise value to earnings before interest, tax, depreciation, and amortization) multiple of ~10.8x on May 7, lower than the industry average of ~11.5x. Eli Lilly, Pfizer, and Bristol-Myers Squibb were trading at higher forward EV-to-EBITDA multiples, of 12.0x, 9.9x, and 13.3x, respectively. The iShares Core High Dividend ETF (HDV) holds 3.5% of its total investments in Merck, 5.1% in Pfizer, and 1.4% in Eli Lilly.

Check out all the data we have added to our quote pages. Now you can get a valuation snapshot, earnings and revenue estimates, and historical data as well as dividend info. Take a look!


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