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In today's rapidly changing and fiercely competitive business landscape, it is essential for investors and industry enthusiasts to thoroughly analyze companies. 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 | 21.34 | 7.23 | 4.70 | 12.22% | $6.96 | $12.23 | 8.89% |
| Eli Lilly and Co | 116.38 | 55.53 | 19.87 | 19.02% | $3.12 | $7.09 | 25.98% |
| Novo Nordisk A/S | 44.63 | 40.01 | 16.31 | 24.73% | $36.91 | $55.43 | 22.45% |
| Johnson & Johnson | 24.41 | 5.43 | 4.58 | 6.62% | $7.8 | $15.58 | 4.31% |
| AstraZeneca PLC | 37.81 | 6.11 | 4.95 | 5.01% | $4.12 | $10.76 | 13.33% |
| Novartis AG | 22.89 | 5.43 | 4.73 | 7.97% | $5.25 | $9.7 | 9.6% |
| Sanofi SA | 28.35 | 1.64 | 2.52 | 1.53% | $2.03 | $7.97 | 6.53% |
| Zoetis Inc | 35.03 | 16.40 | 9.59 | 11.91% | $0.93 | $1.55 | 9.5% |
| GSK PLC | 14.20 | 4.55 | 2.07 | 7.69% | $2.07 | $5.39 | 5.93% |
| Takeda Pharmaceutical Co Ltd | 46.17 | 0.92 | 1.56 | -0.04% | $86.09 | $668.37 | 9.91% |
| Dr Reddy's Laboratories Ltd | 20.26 | 3.82 | 3.90 | 4.84% | $21.72 | $46.34 | 13.87% |
| Jazz Pharmaceuticals PLC | 23.24 | 1.92 | 2.02 | -0.39% | $0.23 | $0.81 | 1.03% |
| Corcept Therapeutics Inc | 31.92 | 6.32 | 7.01 | 6.14% | $0.04 | $0.16 | 39.15% |
| Prestige Consumer Healthcare Inc | 16.91 | 2.12 | 3.14 | 3.04% | $0.09 | $0.15 | -3.11% |
| Average | 35.55 | 11.55 | 6.33 | 7.54% | $13.11 | $63.79 | 12.19% |
Through a thorough examination of Merck & Co, we can discern the following trends:
With a Price to Earnings ratio of 21.34, which is 0.6x less than the industry average, the stock shows potential for growth at a reasonable price, making it an interesting consideration for market participants.
Considering a Price to Book ratio of 7.23, which is well below the industry average by 0.63x, the stock may be undervalued based on its book value compared to its peers.
With a relatively low Price to Sales ratio of 4.7, which is 0.74x the industry average, the stock might be considered undervalued based on sales performance.
With a Return on Equity (ROE) of 12.22% that is 4.68% above the industry average, it appears that the company exhibits efficient use of equity to generate profits.
With lower Earnings Before Interest, Taxes, Depreciation, and Amortization (EBITDA) of $6.96 Billion, which is 0.53x below the industry average, the company may face lower profitability or financial challenges.
The company has lower gross profit of $12.23 Billion, which indicates 0.19x below the industry average. This potentially indicates 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 12.19%, which indicates a challenging sales environment.
The debt-to-equity (D/E) ratio gauges the extent to which a company has financed its operations through debt relative to equity.
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 examining Merck & Co in comparison to its top 4 peers with respect to the Debt-to-Equity ratio, the following information becomes apparent:
Merck & Co is in a relatively stronger financial position compared to its top 4 peers, as evidenced by its lower debt-to-equity ratio of 0.85.
This implies that the company relies less on debt financing and has a more favorable balance between debt and equity.
For Merck & Co in the Pharmaceuticals industry, the PE, PB, and PS ratios are all low compared to peers, indicating potential undervaluation. On the other hand, the high ROE suggests strong profitability, while low EBITDA, gross profit, and revenue growth may raise concerns about operational performance relative to industry peers.
This article was generated by Benzinga's automated content engine and reviewed by an editor.
Posted In: MRK
