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In the fast-paced and highly competitive business world of today, conducting thorough company analysis is essential for investors and industry observers. In this article, we will conduct an extensive industry comparison, evaluating Merck & Co (NYSE:MRK) in relation to its major competitors in the Pharmaceuticals industry. Through a detailed examination of key financial metrics, market standing, and growth prospects, our objective is to provide valuable insights and illuminate company's performance in 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 | 142.69 | 8.06 | 5.32 | 12.22% | $6.96 | $12.23 | 8.89% |
| Eli Lilly and Co | 122.42 | 61.66 | 20.90 | 19.02% | $3.12 | $7.09 | 25.98% |
| Novo Nordisk A/S | 46.91 | 42.06 | 17.15 | 24.73% | $36.91 | $55.43 | 22.45% |
| Johnson & Johnson | 21.95 | 5.08 | 4.34 | 4.69% | $5.68 | $14.87 | 2.34% |
| AstraZeneca PLC | 39.01 | 6.54 | 5.18 | 5.69% | $4.47 | $10.46 | 16.55% |
| Novartis AG | 23.35 | 5.28 | 4.47 | 6.23% | $4.66 | $9.02 | 9.71% |
| GSK PLC | 14.75 | 4.73 | 2.15 | 7.69% | $2.07 | $5.39 | 5.93% |
| Zoetis Inc | 33.21 | 15.55 | 9.09 | 11.91% | $0.93 | $1.55 | 9.5% |
| Takeda Pharmaceutical Co Ltd | 46.09 | 0.91 | 1.56 | -0.04% | $186.41 | $668.37 | -5.43% |
| Dr Reddy's Laboratories Ltd | 17.29 | 3.41 | 3.46 | 4.76% | $20.32 | $49.91 | -1.83% |
| Jazz Pharmaceuticals PLC | 21.89 | 1.80 | 1.91 | -0.39% | $0.23 | $0.81 | 1.03% |
| Corcept Therapeutics Inc | 29.82 | 5.95 | 6.60 | 5.22% | $0.03 | $0.14 | 38.95% |
| Prestige Consumer Healthcare Inc | 15.34 | 1.93 | 2.85 | 3.04% | $0.09 | $0.15 | -3.11% |
| Indivior PLC | 459 | 247.26 | 2.31 | 940.0% | $0.08 | $0.24 | 12.25% |
| Average | 68.54 | 30.94 | 6.31 | 79.43% | $20.38 | $63.34 | 10.33% |
When analyzing Merck & Co, the following trends become evident:
The Price to Earnings ratio of 142.69 for this company is 2.08x above the industry average, indicating a premium valuation associated with the stock.
The current Price to Book ratio of 8.06, which is 0.26x the industry average, is substantially lower than the industry average, indicating potential undervaluation.
With a relatively low Price to Sales ratio of 5.32, which is 0.84x the industry average, the stock might be considered undervalued based on sales performance.
The company has a lower Return on Equity (ROE) of 12.22%, which is 67.21% below the industry average. This indicates potential inefficiency in utilizing equity to generate profits, which could be attributed to various factors.
With lower Earnings Before Interest, Taxes, Depreciation, and Amortization (EBITDA) of $6.96 Billion, which is 0.34x below the industry average, the company may face lower profitability or financial challenges.
Compared to its industry, the company has lower gross profit of $12.23 Billion, which indicates 0.19x below the industry average, potentially indicating lower revenue after accounting for production costs.
The company's revenue growth of 8.89% is significantly lower compared to the industry average of 10.33%. This indicates a potential fall in the company's sales performance.
The debt-to-equity (D/E) ratio indicates the proportion of debt and equity used by a company to finance its assets and operations.
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.
In terms of the Debt-to-Equity ratio, Merck & Co can be assessed by comparing it to its top 4 peers, resulting in the following observations:
Merck & Co has a stronger financial position compared to its top 4 peers, as evidenced by its lower debt-to-equity ratio of 0.85.
This suggests that the company has a more favorable balance between debt and equity, which can be perceived as a positive indicator by investors.
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 standards. In terms of ROE, EBITDA, gross profit, and revenue growth, Merck & Co lags behind its competitors, signaling 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
