1-Star Price
INVESTOR
5-Star Price
INVESTOR
Economic Moat
INVESTOR
Capital Allocation
INVESTOR
Narrow-moat Merck KGaA delivered third-quarter results that were about as expected, and the company continues to track toward our expectations for the full year. After recognizing cash flows generated since our last valuation update, we are raising our fair value estimate moderately. Shares recently traded slightly above our new fair value estimate.
Merck KGaA operates in three main segments: life sciences, performance materials, and healthcare. The life sciences segment (46% of 2021 sales) provides laboratory consumables and instruments to researchers in academia and applied fields, including the biopharmaceutical industry. In the healthcare segment (36%), Merck develops, manufactures, and sells branded pharmaceuticals with significant therapeutic concentrations in oncology, multiple sclerosis, and fertility. In its electronics segment (18%), 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.
