1-Star Price
PREMIUM
5-Star Price
PREMIUM
Economic Moat
PREMIUM
Capital Allocation
PREMIUM
Narrow-moat Merck KGaA reported third-quarter operating results that rebounded sequentially from the nadir in the second quarter and even beat Capital IQ estimates. However, management's outlook for 2020 remains roughly in line with our estimates after adjusting for a recently released legal provision related to a patent dispute with Biogen, and we are maintaining our fair value estimate for Merck KGaA.
Merck KGaA operates in three main segments: life sciences, performance materials, and healthcare. The life sciences segment provides laboratory consumables and instruments to researchers in academia and applied fields, including the biopharmaceutical industry. In its performance materials segment, the company offers specialty materials to manufacture a variety of products, such as semiconductors, flat-screen televisions, automobiles, and cosmetics. In the healthcare segment, Merck develops, manufactures, and sells branded pharmaceuticals with significant therapeutic concentrations in oncology, multiple sclerosis, and fertility. In 1995, the E. Merck KG family publicly sold part of the company, resulting in the current 30% public ownership of the firm.
