Merck (MRK) has moved to deepen its oncology footprint by committing a $30 million investment for nearly a 10% stake in Eikon Therapeutics, and by signing a multi year global cancer collaboration with Guardant Health.

Those oncology deals come on top of a busy few weeks for Merck, including halting acquisition talks with Revolution Medicines, entering several research collaborations and affirming a quarterly dividend of US$0.85 per share. Against that backdrop, the recent 28.25% 3 month share price return and 15.78% 1 year total shareholder return suggest momentum has been building rather than fading.

If you are watching how Big Pharma is repositioning around cancer and vaccines, it can be useful to compare Merck with other large drug makers. You can scan for opportunities across pharma stocks with solid dividends and see which names fit your income and growth checklist.

With MRK up 28.25% over 3 months and trading around US$110.27, while screening as a value score of 5 and a 46% intrinsic discount, you have to ask: is there still upside here, or is the market already pricing in future growth?

Most Popular Narrative: 45.3% Undervalued

Compared with Merck's last close at $110.27, the most followed narrative places fair value at $201.56, framing a large gap between price and projected worth.

For years, the market has treated Merck like a "one-trick pony" due to the looming 2028 "patent cliff," where Keytruda will lose its legal protection and face generic competition. However, in 2026, the story has shifted from fear to execution.

Curious how a company long tied to one flagship drug ends up with a fair value near double its share price? The narrative leans on expanding franchises, richer margins and a future earnings profile more often associated with high growth sectors. Want to see which long term growth and profitability assumptions are doing the heavy lifting in that $201.56 figure, and how they connect back to Merck's current oncology and immunology pipeline story?

Result: Fair Value of $201.56 (UNDERVALUED)

However, this story can crack if drug pricing reforms bite harder than expected, or if newer drugs fail to offset any future Keytruda revenue pressure.

Build Your Own Merck Narrative

If you look at the numbers and reach a different conclusion, or simply prefer to test your own assumptions, you can build a full Merck story yourself in just a few minutes with Do it your way.

A great starting point for your Merck research is our analysis highlighting 5 key rewards and 2 important warning signs that could impact your investment decision.

Looking for more investment ideas?

If Merck has caught your attention, do not stop here; widen your watchlist now so you are not kicking yourself when the next opportunity emerges.

• Target income potential with these 14 dividend stocks with yields > 3%, which could complement a pharma heavyweight like Merck in a more cash focused portfolio.
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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.