Analyst Note
| Julie Utterback, CFA |Narrow-moat Merck KGaA revealed solid first-quarter results and a slightly higher outlook than we had been incorporating in our model for 2022. With those solid trends and cash flows generated since our last valuation update, we have raised our EUR fair value estimate by 7%. However, because of recent strengthening of the U.S. dollar, we are actually trimming our U.S. ADR valuation by 3%. Overall, even after the recent pullback in Merck shares, we still see shares as trading slightly above fair value.