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Merck KGaA MRK

Morningstar Rating
€175.85 +4.05 (2.36%)
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Company Report

Merck KGaA Earnings: Electronic and Life Science Turnarounds Starting in 2024

Narrow-moat Merck KGaA's first-quarter results included the beginning of a turnaround in electronics and some positive signs in the life science business that should start turning around in the second half of the year, if only for easier comparable results. Management also gave initial guidance ranges for revenue and adjusted EPS that look roughly in line with our view of the firm's prospects in 2024. At first glance, we do not anticipate changing our fair value estimate, and shares appear to be rising toward fair value on this news.

Price vs Fair Value

MRK is trading at a 137% premium.
Price
€171.80
Fair Value
€198.00
Uncertainty
Medium
1-Star Price
€559.27
5-Star Price
€148.40
Economic Moat
Kfnym
Capital Allocation
Yzlyvlxmd

Bulls Say, Bears Say

Bulls

In the long run, Merck's life sciences segment should continue to benefit from expanding pharmaceutical pipelines as a key supplier to those firms' R&D and manufacturing operations.

Bears

Merck's legacy healthcare products, such as Rebif and Erbitux, may remain under pressure from indirect competition, which creates a significant hurdle for its biopharmaceutical pipeline to offset.

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News

Trading Information

Previous Close Price
€171.80
Day Range
€171.65176.25
52-Week Range
€134.30176.25
Bid/Ask
€0.00 / €0.00
Market Cap
€76.46 Bil
Volume/Avg
344,307 / 270,022

Key Statistics

Price/Earnings (Normalized)
23.20
Price/Sales
3.57
Dividend Yield (Trailing)
1.28%
Dividend Yield (Forward)
1.28%
Total Yield
1.28%

Company Profile

Merck KGaA operates in three main segments: life sciences, performance materials, and healthcare. The life sciences segment (44% of 2023 sales) primarily provides laboratory consumables and services to researchers in academia and applied fields, including the biopharmaceutical industry. In the healthcare segment (38%), Merck develops, manufactures, and sells branded pharmaceuticals with significant therapeutic concentrations in oncology, multiple sclerosis, and fertility. In its electronics segment (17%), 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.
Sector
Healthcare
Industry
Drug Manufacturers - Specialty & Generic
Stock Style Box
Large Core
Total Number of Employees
62,345

Competitors

Valuation

Metric
MRK
BIIB
TMO
Price/Earnings (Normalized)
23.2015.0726.64
Price/Book Value
2.662.154.83
Price/Sales
3.573.415.24
Price/Cash Flow
17.0714.0925.69
Price/Earnings
MRK
BIIB
TMO

Financial Strength

Metric
MRK
BIIB
TMO
Quick Ratio
0.720.921.19
Current Ratio
1.292.001.70
Interest Coverage
10.235.134.83
Quick Ratio
MRK
BIIB
TMO

Profitability

Metric
MRK
BIIB
TMO
Return on Assets (Normalized)
5.60%8.32%8.69%
Return on Equity (Normalized)
10.13%15.02%18.71%
Return on Invested Capital (Normalized)
7.63%10.29%10.97%
Return on Assets
MRK
BIIB
TMO
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