The drugmaker looks expensive today, but the real story is what you are actually paying for the earnings of tomorrow.

At a glance, Merck (MRK) stock looks pricey. Trading at about 35.3 times the last twelve months of reported earnings, it carries the kind of premium that makes many investors stop looking. But that headline number is not the full story.

Look two years out, and the picture changes completely. On the earnings analysts expect by 2027, that same $128 share price is only about 13.2 times earnings. That is a 63% lower multiple, a steep discount that materializes as projected earnings grow into today’s price. For a patient holder, this is the effective price you are paying for the business of 2027. It is crucial to note that…