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Merck KGaA ADR MKKGY

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Stock PINX Rating as of
$36.31 −0.30 (0.82%)
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Company Report

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

Julie Utterback

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.

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Price vs Fair Value

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MKKGY is trading at a 115% premium.
Price
$36.31
Fair Value
$46.00
Uncertainty
Medium
1-Star Price
$48.50
5-Star Price
$99.20
Economic Moat
Zhdhzy
Capital Allocation
Ylwkhksb

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

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Trading Information

Previous Close Price
$36.61
Day Range
$36.19–36.52
52-Week Range
$28.59–36.89
Bid/Ask
$35.82 / $36.68
Market Cap
$78.93 Bil
Volume/Avg
24,726 / 96,047

Key Statistics

Price/Earnings (Normalized)
21.88
Price/Sales
3.49
Dividend Yield (Trailing)
1.30%
Dividend Yield (Forward)
1.30%
Total Yield
1.30%

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
Website
https://www.emdgroup.com

Competitors

Valuation

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Metric
MKKGY
TMO
DHR
Price/Earnings (Normalized)
 21.8827.6232.90
Price/Book Value
 2.615.013.68
Price/Sales
 3.495.448.80
Price/Cash Flow
 16.6726.6429.97
Price/Earnings
MKKGY
TMO
DHR

Financial Strength

Metric
MKKGY
TMO
DHR
Quick Ratio
 0.721.191.34
Current Ratio
 1.291.701.85
Interest Coverage
 10.234.8315.85
Quick Ratio
MKKGY
TMO
DHR

Profitability

Metric
MKKGY
TMO
DHR
Return on Assets (Normalized)
 5.60%8.69%5.15%
Return on Equity (Normalized)
 10.13%18.71%8.40%
Return on Invested Capital (Normalized)
 7.63%10.97%6.02%
Return on Assets
MKKGY
TMO
DHR
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