Merck KGaA Earnings: Life Science and Semiconductor Challenges Likely to End in Second Half of 2024

Narrow-moat Merck KGaA's fourth-quarter results reflected continued challenges in its life science and semiconductor end markets. The firm generated results within its target ranges for 2023, albeit a little lower than we were expecting. However, management reiterated its goal of returning to organic growth in 2024, which it characterized as slight to moderate growth on the top and bottom lines, suggesting that the 2023 declines in its life science and electronics segments will start reversing this year. At first glance, we do not anticipate changing our fair value estimate. The shares appear about fairly valued.