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1. Company Snapshot

1.a. Company Description

MERCK Kommanditgesellschaft auf Aktien operates in the healthcare, life science, and electronics sectors worldwide.It discovers, develops, manufactures, and markets pharmaceutical and biological prescription drugs to treat neurology and immunology, oncology, fertility, and cardiology metabolism and endocrinology.The company also supplies products, tools, and services for research laboratories, pharma and biotech production, and industrial and testing laboratories.


In addition, it offers material for integrated circuits, liquid crystals, organic light-emitting diodes, photoresists, smart antenna, and liquid crystal glazing solutions, as well as effect pigments for use in automotive coatings, cosmetics, industrial, and plastic applications.It has strategic alliances with Pfizer Inc.; agreement with Novartis AG; and license agreements with Debiopharm International SA and MoonLake Immunotherapeutics AG.The company was founded in 1668 and is headquartered in Darmstadt, Germany.


MERCK Kommanditgesellschaft auf Aktien is a subsidiary of E.Merck Kommanditgesellschaft.

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1.b. Last Insights on MRK

Merck KGaA faced challenges due to a rocky few months, with a 1-year total shareholder return of -24.58%. The company's valuation was impacted by shifting market sentiment, with its share price dipping 1.4% over 7 days and 19.2% year-to-date. Despite robust organic growth across sectors, currency headwinds and competitive pressures posed challenges. However, strong Q3 earnings, driven by demand for pharma-production products and semiconductor materials, boosted results, with adjusted earnings beating expectations. This solid performance helped stabilize the share price.

1.c. Company Highlights

2. Merck's Q3 '25 Results: Solid Organic Growth Across All Sectors

Merck's Q3 '25 results showed a strong financial performance, with group revenues increasing organically by 5.2% and EBITDA pre rising by 8.8%. EBITDA pre amounted to EUR 1.69 billion, with a margin of 31.4%. EPS pre increased slightly by 0.9% to EUR 2.32 per share, while actual EPS came out at EUR 2.35, beating estimates of EUR 2.24. The company's financial performance was driven by solid organic growth across all three sectors: Life Science, Healthcare, and Electronics.

Publication Date: Nov -14

📋 Highlights
  • Group Revenue & EBITDA Growth:: Organic revenue growth of 5.2% (€20.8-21.4B guidance) and EBITDA pre 8.8% (€1.69B in Q3, €6-6.2B guidance for 2025) driven by all three sectors.
  • Healthcare Guidance Downgraded:: Organic growth narrowed to 3% (from 3-5%) due to Erbitux, Gonal-f, Bavencio underperformance and Q4 sales pull-in; EPS pre guidance at €8.20-8.60.
  • SpringWorks Acquisition Boost:: EBITDA contribution upgraded to €180M; Ogsiveo sales rose 38% YoY to €62M, Gomekli surged 73% QoQ to €23M.
  • Mavenclad Erosion Risk:: Sales up 20% YoY to €304M, but U.S. faces generic competition (potential entry Nov 22) and margin pressure in 2026.
  • Fertility Segment Outlook:: Q3 revenue €360M (+2% organic), with 2026 growth expected from Pergoveris launches in China (H1) and U.S. (H2) despite Gonal-f price erosion.

Segmental Performance

The Life Science segment delivered 6% organic sales growth, driven by Process Solutions' 10.3% growth. The Healthcare segment grew 4.6% organically, led by the CM&E franchise's 7% growth. Electronics saw 5% organic growth, driven by the semi-material business. The company's segmental performance was a key driver of its overall financial performance.

Guidance and Outlook

The company confirmed and narrowed its absolute guidance ranges for net sales, EBITDA pre, and EPS pre for full-year 2025. For 2026, Merck expects Healthcare margins to remain north of 30%. The company's guidance and outlook indicate a positive trajectory, with a focus on mitigating the impact of Mavenclad erosion in the U.S.

Valuation and Metrics

With a P/E Ratio of 17.93 and an EV/EBITDA of 10.14, Merck's valuation appears reasonable. The company's ROIC of 7.43% and ROE of 9.85% indicate a decent return on capital. Analysts estimate next year's revenue growth at 2.5%, which is lower than the current year's growth rate. The company's dividend yield of 1.86% and free cash flow yield of 3.47% provide a relatively stable return to shareholders.

Key Highlights and Milestones

The SpringWorks acquisition's EBITDA contribution was upgraded to €180 million, driven by better-than-expected sales of Ogsiveo and Gomekli. Merck expects to initiate a Phase III trial for precemtabart tocentecan in colorectal cancer and release data from the pan-tumor trial in 2026. The company also expects to file Pergoveris with the U.S. FDA in the next couple of weeks, which could provide a significant upside if approved.

3. NewsRoom

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Does Merck KGaA’s Biotech Expansion Signal Opportunity After 20% Share Price Drop in 2025?

Nov -21

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Equinix Hosts Merck KGaA's HPC at its Data Center in Germany

Nov -21

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Merck KGaA eyes new Parkinson’s disease assets with $3bn Valo partnership

Nov -20

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High-Performance Supercomputer Launched to Advance AI Innovation and Scientific Discovery

Nov -20

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Valo Health Announces Collaboration with Merck KGaA, Darmstadt, Germany to Discover and Develop Novel Treatments for Parkinson’s Disease and Related Disorders

Nov -20

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Health Care Roundup: Market Talk

Nov -13

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Merck KGaA (MKGAF) Q3 2025 Earnings Call Highlights: Strong Organic Growth Amidst Market Challenges

Nov -13

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Health Care Roundup: Market Talk

Nov -13

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4. Business Breakdown

4.a. Revenues by Country

4.b. Revenues by Segment

5. Expected revenues mid-term growth (7.16%)

6. Segments

Life Science

Expected Growth: 4.8%

Merck's strong pipeline and increasing adoption of immunotherapy treatments drive growth in oncology, while investments in research and development bolster expansion in neurology and immunology therapeutic areas.

Healthcare

Expected Growth: 8.3%

Merck KGaA's pharmaceuticals and vaccines segment is driven by growing demand for oncology and immunology treatments, strong product pipeline, and strategic acquisitions, leading to a forecasted 8.3% CAGR.

Electronics

Expected Growth: 10.2%

Driven by increasing demand for high-tech products in the electronics industry, Merck KGaA's segment is expected to grow significantly, fueled by advancements in technologies and increasing adoption in various industries.

Corporate and Other

Expected Growth: 5.4%

Merck's Corporate and Other segment growth driven by strategic business units and support functions, enabling the company to invest in research and development, driving innovation and ultimately revenue growth.

7. Detailed Products

Pharmaceuticals

Merck KGaA's pharmaceutical segment offers a range of prescription medicines and vaccines for various therapeutic areas, including oncology, neurology, and immunology.

Life Science

Merck KGaA's life science segment provides products and services for researchers, including lab supplies, bioprocessing materials, and bioanalytical instruments.

Performance Materials

Merck KGaA's performance materials segment offers specialty chemicals, including pigments, liquid crystals, and other materials for various industries.

Allergopharma

Merck KGaA's allergopharma segment offers allergy diagnostic and treatment products, including tests and therapies for allergies.

Biosimilars

Merck KGaA's biosimilars segment offers lower-cost, generic versions of biologic medicines.

Consumer Health

Merck KGaA's consumer health segment offers over-the-counter (OTC) medicines and supplements for various health needs.

8. MERCK Kommanditgesellschaft auf Aktien's Porter Forces

Forces Ranking

Threat Of Substitutes

The threat of substitutes for Merck Kommanditgesellschaft auf Aktien is moderate due to the presence of alternative pharmaceutical companies and generic drug manufacturers.

Bargaining Power Of Customers

The bargaining power of customers is low due to the specialized nature of Merck's pharmaceutical products and the lack of buyer concentration.

Bargaining Power Of Suppliers

The bargaining power of suppliers is moderate due to the presence of multiple suppliers for raw materials and the company's ability to negotiate prices.

Threat Of New Entrants

The threat of new entrants is low due to the high barriers to entry in the pharmaceutical industry, including regulatory hurdles and significant capital requirements.

Intensity Of Rivalry

The intensity of rivalry is high due to the presence of established pharmaceutical companies and the ongoing competition for market share and innovation.

9. SWOT Analysis

Strength

Weaknesses

Opportunities

Threats

10. Capital Structure

10.a. Balance Sheet

10.b. Weighted Average Cost of capital

Value
Debt Weight 26.36%
Debt Cost 3.95%
Equity Weight 73.64%
Equity Cost 7.39%
WACC 6.48%
Leverage 35.79%

11. Quality Control: MERCK Kommanditgesellschaft auf Aktien passed 4 out of 9 key points

12.a Historical Valuation

12.b Price/Earnings Ratio

12.c Margin Valuation

12.d Peers Valuation

Peers Group Analysis

Stock-Card
Novartis

A-Score: 6.3/10

Value: 3.5

Growth: 4.2

Quality: 7.8

Yield: 7.5

Momentum: 5.5

Volatility: 9.3

1-Year Total Return ->

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Stock-Card
Ipsen

A-Score: 5.5/10

Value: 5.0

Growth: 6.0

Quality: 7.7

Yield: 1.2

Momentum: 6.0

Volatility: 7.3

1-Year Total Return ->

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Stock-Card
EssilorLuxottica

A-Score: 5.2/10

Value: 0.8

Growth: 5.8

Quality: 6.2

Yield: 3.1

Momentum: 8.0

Volatility: 7.0

1-Year Total Return ->

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Stock-Card
Haleon

A-Score: 5.1/10

Value: 3.5

Growth: 6.0

Quality: 6.7

Yield: 3.1

Momentum: 2.0

Volatility: 9.0

1-Year Total Return ->

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Stock-Card
Novo Nordisk

A-Score: 4.4/10

Value: 3.5

Growth: 8.8

Quality: 8.0

Yield: 5.0

Momentum: 0.0

Volatility: 1.3

1-Year Total Return ->

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Stock-Card
Merck KGaA

A-Score: 4.4/10

Value: 4.2

Growth: 4.9

Quality: 6.5

Yield: 3.1

Momentum: 1.0

Volatility: 6.7

1-Year Total Return ->

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Peers Metrics

12.e Scoring Insights

12.f DCF BETA

Parameters

Short Term Growth

Short term Time

Long-Term Growth

WACC

Target Price

120.65$

Current Price

120.65$

Potential

-0.00%

Expected Cash-Flows