Merck (MRK) shares have seen notable swings recently, leaving investors curious about what might be driving the movement. Looking at recent performance trends, Merck’s returns over the past month and past 3 months provide some perspective on its current trajectory.

Zooming out, Merck’s share price return over the past year has been fairly muted, trailing many peers as momentum has faded following more robust earlier performance. However, with steady long-run total shareholder returns and an $89.51 share price, there is still potential on investors’ radars as the company realigns around recent events and outlook shifts.

If you're interested in discovering more opportunities in healthcare alongside Merck, see what’s trending now with our See the full list for free.

With shares still trading below analyst targets and a mixed track record in recent returns, the big question remains: Is Merck currently undervalued, or is the current price already reflecting all of its future growth prospects?

Most Popular Narrative: 12.5% Undervalued

With Merck shares closing at $89.51 and the most closely followed narrative placing fair value at $102.33, the story behind this gap demands attention. The narrative consensus hinges on a set of ambitious catalysts that may shape Merck’s future earnings trajectory.

Merck's strategic investments and acquisitions have tripled its pipeline, aiming to significantly drive earnings growth through blockbuster potential products. Robust R&D and new product launches are expected to maintain leadership in oncology, boosting revenue and enhancing long-term margins.

Want to know what drives Merck’s valuation higher than its current price? This narrative leans on bold projections for new launches, margin expansion, and blockbuster ambitions. Curious how the analysts connect the dots between pipeline growth and future profits? Unlock the precise assumptions that build up to this fair value.

Result: Fair Value of $102.33 (UNDERVALUED)

However, risks remain, including declining Gardasil sales in China and potential new tariffs. Both of these factors could pressure Merck’s future growth story.

Build Your Own Merck Narrative

If you have a different perspective or want to draw your own conclusions from the data, you can easily craft a unique view in just minutes with our tools. Do it your way

A great starting point for your Merck research is our analysis highlighting 5 key rewards and 1 important warning sign that could impact your investment decision.

Looking for more investment ideas?

Stay ahead of the crowd by taking charge of your next investment move. Don’t let great opportunities slip by; seize your edge in the market today.

• Start building a cash-generating portfolio with above-average yields by checking out these 19 dividend stocks with yields > 3% for high-potential income picks.
• Capture the growth trend in artificial intelligence by uncovering tomorrow’s headline makers through these 24 AI penny stocks in this fast-evolving sector.
• Tap into overlooked value and spot hidden bargains instantly when you use these 910 undervalued stocks based on cash flows for potential winners trading below intrinsic value.

This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned.