Moderna shares fall over 5%, Merck & Co. declines 2.2%

Moderna (MRNA) shares fell more than 5% in early trading on August 28, 2026, while Merck & Co. (MRK) declined by 2.2%. The drop follows a period of strong performance for both companies, with Merck having returned 126.6% over the past five years and Moderna experiencing a 177% surge in a single day earlier in the week after positive results from a Phase 3 trial of an experimental mRNA-based cancer vaccine in combination with Merck’s Keytruda.

The recent trial results had initially driven optimism about the long-term cash flow potential for both firms, particularly for Merck, whose DCF intrinsic value model suggests the stock is undervalued by 35.8% based on expected future cash flows. However, Merck’s current P/E ratio of 116.3x remains significantly higher than the pharmaceutical industry average of 16.8x, indicating that investors are paying a premium for its earnings.

The market’s mixed signals highlight the challenge of assessing whether Merck is overvalued or undervalued, with the DCF model suggesting upside while traditional valuation metrics point to a more expensive stock. Investors will be watching closely to see how the market reacts to the latest developments and whether the recent gains will hold.