Stock Analysis on Net

Merck & Co. Inc. (NYSE:MRK)

Enterprise Value to EBITDA (EV/EBITDA)

Microsoft Excel

Earnings before Interest, Tax, Depreciation and Amortization (EBITDA)

Merck & Co. Inc., EBITDA calculation

US$ in millions

Microsoft Excel
12 months ended: Dec 31, 2023 Dec 31, 2022 Dec 31, 2021 Dec 31, 2020 Dec 31, 2019
Net income attributable to Merck & Co., Inc. 365 14,519 13,049 7,067 9,843
Add: Net income attributable to noncontrolling interest 12 7 13 15 (66)
Less: Income from discontinued operations, net of taxes 704
Add: Income tax expense 1,512 1,918 1,521 1,709 1,687
Earnings before tax (EBT) 1,889 16,444 13,879 8,791 11,464
Add: Interest expense 1,146 962 806 831 893
Earnings before interest and tax (EBIT) 3,035 17,406 14,685 9,622 12,357
Add: Amortization 2,044 2,085 1,636 1,899 1,973
Add: Depreciation 1,828 1,824 1,578 1,726 1,679
Earnings before interest, tax, depreciation and amortization (EBITDA) 6,907 21,315 17,899 13,247 16,009

Based on: 10-K (reporting date: 2023-12-31), 10-K (reporting date: 2022-12-31), 10-K (reporting date: 2021-12-31), 10-K (reporting date: 2020-12-31), 10-K (reporting date: 2019-12-31).

Item Description The company
EBITDA To calculate EBITDA analysts start with net earnings. To that earnings number, interest, taxes, depreciation, and amortization are added. EBITDA as a pre-interest number is a flow to all providers of capital. Merck & Co. Inc. EBITDA increased from 2021 to 2022 but then decreased significantly from 2022 to 2023.

Enterprise Value to EBITDA Ratio, Current

Merck & Co. Inc., current EV/EBITDA calculation, comparison to benchmarks

Microsoft Excel
Selected Financial Data (US$ in millions)
Enterprise value (EV) 335,783
Earnings before interest, tax, depreciation and amortization (EBITDA) 6,907
Valuation Ratio
EV/EBITDA 48.61
Benchmarks
EV/EBITDA, Competitors1
AbbVie Inc. 21.01
Amgen Inc. 13.36
Bristol-Myers Squibb Co. 6.89
Eli Lilly & Co. 86.25
Gilead Sciences Inc. 10.43
Johnson & Johnson 16.61
Pfizer Inc. 22.73
Regeneron Pharmaceuticals Inc. 20.82
Thermo Fisher Scientific Inc. 22.65
Vertex Pharmaceuticals Inc. 20.52
EV/EBITDA, Sector
Pharmaceuticals, Biotechnology & Life Sciences 22.39
EV/EBITDA, Industry
Health Care 18.77

Based on: 10-K (reporting date: 2023-12-31).

1 Click competitor name to see calculations.

If the company EV/EBITDA is lower then the EV/EBITDA of benchmark then company is relatively undervalued.
Otherwise, if the company EV/EBITDA is higher then the EV/EBITDA of benchmark then company is relatively overvalued.


Enterprise Value to EBITDA Ratio, Historical

Merck & Co. Inc., historical EV/EBITDA calculation, comparison to benchmarks

Microsoft Excel
Dec 31, 2023 Dec 31, 2022 Dec 31, 2021 Dec 31, 2020 Dec 31, 2019
Selected Financial Data (US$ in millions)
Enterprise value (EV)1 354,322 296,532 217,996 212,628 218,739
Earnings before interest, tax, depreciation and amortization (EBITDA)2 6,907 21,315 17,899 13,247 16,009
Valuation Ratio
EV/EBITDA3 51.30 13.91 12.18 16.05 13.66
Benchmarks
EV/EBITDA, Competitors4
AbbVie Inc. 20.79 13.31 13.44 21.34 13.68
Amgen Inc. 14.13 12.97 13.22 12.24 12.26
Bristol-Myers Squibb Co. 6.51 9.46 8.65 34.35 23.84
Eli Lilly & Co. 85.33 37.74 29.85 23.67 21.40
Gilead Sciences Inc. 10.41 13.89 8.57 24.90 11.77
Johnson & Johnson 16.45 14.78 14.47 18.20 16.28
Pfizer Inc. 22.50 6.12 8.64 15.78 9.17
Regeneron Pharmaceuticals Inc. 20.16 15.27 6.68 12.70 14.80
Thermo Fisher Scientific Inc. 21.83 20.25 20.21 18.72 19.74
Vertex Pharmaceuticals Inc. 21.57 14.91 18.92 14.81 37.82
EV/EBITDA, Sector
Pharmaceuticals, Biotechnology & Life Sciences 22.37 13.30 12.71 18.44 14.72
EV/EBITDA, Industry
Health Care 18.75 13.67 13.83 16.25 14.26

Based on: 10-K (reporting date: 2023-12-31), 10-K (reporting date: 2022-12-31), 10-K (reporting date: 2021-12-31), 10-K (reporting date: 2020-12-31), 10-K (reporting date: 2019-12-31).

1 See details »

2 See details »

3 2023 Calculation
EV/EBITDA = EV ÷ EBITDA
= 354,322 ÷ 6,907 = 51.30

4 Click competitor name to see calculations.

Valuation ratio Description The company
EV/EBITDA Enterprise value to earnings before interest, tax, depreciation and amortization is a valuation indicator for the overall company rather than common stock. Merck & Co. Inc. EV/EBITDA ratio increased from 2021 to 2022 and from 2022 to 2023.