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Merck KGaA ADR MKKGY

Rating as of

Morningstar’s Analysis

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1-Star Price

PREMIUM

5-Star Price

PREMIUM

Economic Moat

PREMIUM

Capital Allocation

PREMIUM

Raising Merck KGaA's FVE on Strong Near-Term Trends; Shares Rich on Cloudy Intermediate-Term Outlook

Julie Utterback, CFA Senior Equity Analyst

Analyst Note

| Julie Utterback, CFA |

After releasing preliminary results about a week ago, narrow-moat Merck KGaA revealed strong third-quarter operating results. We have raised our fair value estimate to EUR 137 based on this near-term outperformance. However, shares still look significantly overvalued to us when considering Merck's intermediate-term prospects may face pressure as the pandemic dissipates.

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Company Profile

Business Description

Merck KGaA operates in three main segments: life sciences, performance materials, and healthcare. The life sciences segment (43% of 2020 sales) provides laboratory consumables and instruments 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 (19%), 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.

Contact
Frankfurter Strasse 250
Darmstadt, 64293, Germany
T +49 6151720
Sector Healthcare
Industry Drug Manufacturers - Specialty & Generic
Most Recent Earnings Sep 30, 2021
Fiscal Year End Dec 31, 2017
Stock Type
Employees 59,308