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In today's fast-paced and competitive business landscape, it is essential for investors and industry enthusiasts to thoroughly analyze companies before making investment decisions. In this article, we will conduct a comprehensive industry comparison, evaluating Merck & Co (NYSE:MRK) against its key competitors in the Pharmaceuticals industry. By examining key financial metrics, market position, and growth prospects, we aim to provide valuable insights for investors and shed light on company's performance within the industry.
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 pediatric diseases as well as human papillomavirus, or HPV. Additionally, Merck sells animal health-related drugs. From a geographical perspective, just under half of the company's sales are generated in the United States.
| Company | P/E | P/B | P/S | ROE | EBITDA (in billions) | Gross Profit (in billions) | Revenue Growth |
|---|---|---|---|---|---|---|---|
| Merck & Co Inc | 145.54 | 8.22 | 5.43 | 12.22% | $6.96 | $12.23 | 8.89% |
| Eli Lilly and Co | 115.34 | 58.10 | 19.69 | 19.02% | $3.12 | $7.09 | 25.98% |
| Novo Nordisk A/S | 45.83 | 41.10 | 16.75 | 24.73% | $36.91 | $55.43 | 22.45% |
| Johnson & Johnson | 22.48 | 5.20 | 4.44 | 4.69% | $5.68 | $14.87 | 2.34% |
| AstraZeneca PLC | 38.08 | 6.38 | 5.06 | 5.69% | $4.47 | $10.46 | 16.55% |
| Novartis AG | 23.37 | 5.29 | 4.47 | 6.23% | $4.66 | $9.02 | 9.71% |
| GSK PLC | 16.13 | 5.17 | 2.35 | 2.64% | $2.07 | $5.39 | 9.16% |
| Zoetis Inc | 33.60 | 15.73 | 9.20 | 11.91% | $0.93 | $1.55 | 9.5% |
| Takeda Pharmaceutical Co Ltd | 45.35 | 0.89 | 1.53 | -0.04% | $186.41 | $668.37 | -5.43% |
| Dr Reddy's Laboratories Ltd | 17.14 | 3.38 | 3.42 | 4.76% | $20.32 | $49.91 | -1.83% |
| Jazz Pharmaceuticals PLC | 22.49 | 1.85 | 1.96 | -0.39% | $0.23 | $0.81 | 1.03% |
| Prestige Consumer Healthcare Inc | 15.52 | 1.95 | 2.88 | 3.04% | $0.09 | $0.15 | -3.11% |
| Corcept Therapeutics Inc | 27.50 | 5.49 | 6.09 | 5.22% | $0.03 | $0.14 | 38.95% |
| Indivior PLC | 427.25 | 230.82 | 2.15 | 940.0% | $0.08 | $0.24 | 12.25% |
| Average | 65.39 | 29.33 | 6.15 | 79.04% | $20.38 | $63.34 | 10.58% |
When analyzing Merck & Co, the following trends become evident:
Notably, the current Price to Earnings ratio for this stock, 145.54, is 2.23x above the industry norm, reflecting a higher valuation relative to the industry.
The current Price to Book ratio of 8.22, which is 0.28x the industry average, is substantially lower than the industry average, indicating potential undervaluation.
The Price to Sales ratio is 5.43, which is 0.88x the industry average. This suggests a possible undervaluation based on sales performance.
With a Return on Equity (ROE) of 12.22% that is 66.82% below the industry average, it appears that the company exhibits potential inefficiency in utilizing equity to generate profits.
Compared to its industry, the company has lower Earnings Before Interest, Taxes, Depreciation, and Amortization (EBITDA) of $6.96 Billion, which is 0.34x below the industry average, potentially indicating lower profitability or financial challenges.
With lower gross profit of $12.23 Billion, which indicates 0.19x below the industry average, the company may experience lower revenue after accounting for production costs.
The company is witnessing a substantial decline in revenue growth, with a rate of 8.89% compared to the industry average of 10.58%, which indicates a challenging sales environment.
The debt-to-equity (D/E) ratio is a measure that indicates the level of debt a company has taken on relative to the value of its assets net of liabilities.
Considering the debt-to-equity ratio in industry comparisons allows for a concise evaluation of a company's financial health and risk profile, aiding in informed decision-making.
When comparing Merck & Co with its top 4 peers based on the Debt-to-Equity ratio, the following insights can be observed:
When comparing the debt-to-equity ratio, Merck & Co is in a stronger financial position compared to its top 4 peers.
The company has a lower level of debt relative to its equity, indicating a more favorable balance between the two with a lower debt-to-equity ratio of 0.85.
For Merck & Co in the Pharmaceuticals industry, the PE ratio is high compared to peers, indicating potential overvaluation. The PB and PS ratios are low, suggesting undervaluation relative to industry competitors. In terms of ROE, EBITDA, gross profit, and revenue growth, Merck & Co lags behind its peers, reflecting weaker financial performance and growth prospects within the sector.
This article was generated by Benzinga's automated content engine and reviewed by an editor.
Posted In: MRK
