1-Star Price
INVESTOR
5-Star Price
INVESTOR
Economic Moat
INVESTOR
Capital Allocation
INVESTOR
Narrow-moat Merck KGaA revealed solid second-quarter results and a slightly higher outlook than we had been incorporating into our model for 2022. Even after recognizing those decent trends in our model, though, we do not anticipate changing our fair value estimate at first glance. The shares continue to trade at moderately rich levels, in our opinion.
Merck KGaA operates in three main segments: life sciences, performance materials, and healthcare. The life sciences segment (46% of 2021 sales) provides laboratory consumables and instruments to researchers in academia and applied fields, including the biopharmaceutical industry. In the healthcare segment (36%), Merck develops, manufactures, and sells branded pharmaceuticals with significant therapeutic concentrations in oncology, multiple sclerosis, and fertility. In its electronics segment (18%), the company offers specialty materials to manufacture a variety of products, such as semiconductors, flat-screen televisions, automobiles, and cosmetics. In 1995, the E. Merck KG family publicly sold part of the company, resulting in the current 30% public ownership of the firm.
