Merck KGaA (MRK) AI Stock Analysis

• Market Cap: €51.17B
• Dividend Yield: 1.87%
• Average Volume (3M): 271.28K
• Price to Earnings (P/E): 18.3
• Beta (1Y): 0.68
• Revenue Growth: 1.67%
• EPS Growth: 9.02%
• Country: DE
• Employees: 59,020
• Sector: Healthcare
• Sector Strength: 45
• Industry: Drug Manufacturers - Specialty & Generic
• EPS (TTM): 2.02
• Shares Outstanding: 129,242,250
• 10 Day Avg. Volume: 364,990
• 30 Day Avg. Volume: 271,284
• PEG Ratio: N/A
• Price to Book (P/B): N/A
• Price to Sales (P/S): N/A
• P/FCF Ratio: N/A
• Enterprise Value/Market Cap: N/A
• Enterprise Value/Revenue: N/A
• Enterprise Value/Gross Profit: N/A
• Enterprise Value/Ebitda: N/A
• 1Y Price Target: €144.44
• Price Target Upside: 19.52% Upside
• Rating Consensus: Moderate Buy
• Number of Analyst Covering: 10

• Rating: 65 Neutral
• Price Target: €129.00 ▲(6.74% Upside)

Merck KGaA's strong financial performance is offset by technical indicators suggesting overbought conditions and a valuation that is not particularly attractive. The lack of earnings call and corporate events data limits further insights.

Positive Factors

Strong Profitability

Healthy EBIT and EBITDA margins indicate efficient operations and cost management, supporting long-term profitability and competitive positioning.

Stable Financial Position

A stable balance sheet with low leverage enhances financial flexibility, allowing Merck KGaA to invest in growth opportunities and withstand economic fluctuations.

Strong Capital Structure

A strong capital structure provides resilience against financial stress and supports sustained investment in R&D and strategic initiatives.

Negative Factors

Negative Revenue Growth

Negative revenue growth suggests challenges in expanding market share or product adoption, potentially impacting long-term sales and profitability.

Declining Free Cash Flow

Declining free cash flow may limit Merck KGaA's ability to fund new projects, pay down debt, or return capital to shareholders, affecting future liquidity.

Need for Enhanced Profitability

A slight decline in return on equity indicates a need to enhance profitability through improved operational efficiencies or strategic initiatives.

Merck KGaA Business Overview & Revenue Model

Company Description

Merck KGaA operates as a science and technology company in Germany. It operates through Life Science, Healthcare, and Electronics segments. The company's Life Science segment offers tools, chemicals, and equipment for academic labs, biotech, and pharmaceutical manufacturers, as well as industrial sector. This segment also provides drug manufacturers with process development expertise and technologies, such as continuous bioprocessing; testing kits and services; reagents and services; testing solutions that analyze air, water, and soil; and testing and tools, as well as products that help test nutritional value and identify quality inconsistencies. The Healthcare segment discovers, develops, manufacturers, and markets prescription drugs and biopharmaceuticals for the treatment of oncology, neurology and immunology, fertility, endocrinology, as well as cardiovascular, diabetes, thyroid disorders, and multiple sclerosis; general medicines; and injection device and disease monitoring software. The Electronics segment supplies materials for the semiconductor and display industries and surface design, such as delivery systems and services, as well as surface solutions, including cosmetics, effect pigments, and functional solutions. In addition, it has in-licensing agreement with Debiopharm International SA for developing and commercializing drug candidates for the treatment of head and neck cancer; Jiangsu Hengrui Pharmaceuticals Co. Ltd. for developing, manufacturing, and commercializing drug candidates for the treatment of metastatic colorectal cancer; and Abbisko Therapeutics Co. Ltd. for developing and commercializing of drug candidates for the treatment of tenosynovial giant cell tumor, as well as license and collaboration agreement with Merck KGaA to discover two targeted protein degraders against critical oncogenic proteins. The company was founded in 1668 and is headquartered in Darmstadt, Germany. Merck KGaA operates as a subsidiary of E. Merck KG.

How the Company Makes Money

Merck KGaA generates revenue through several key streams. The healthcare segment is a major contributor, with sales from prescription drugs and biopharmaceuticals targeting various therapeutic areas. The life science sector provides laboratory supplies, reagents, and services for research and production processes, catering to academic institutions and industrial customers. The performance materials division specializes in providing high-tech materials for the electronics industry, including liquid crystals and pigments. Strategic partnerships and collaborations with biotech firms and research institutions enhance Merck's innovation capabilities and market reach, contributing significantly to its earnings. Additionally, investment in R&D fosters the development of new products, which can lead to increased sales and market share.

Merck KGaA Financial Statement Overview

Summary

Merck KGaA demonstrates strong profitability with healthy EBIT and EBITDA margins and a stable financial position. However, recent declines in revenue growth and free cash flow highlight areas for improvement, necessitating a focus on revenue generation and cash flow management.

Income Statement

Merck KGaA's income statement shows strong profitability with a consistent gross profit margin around 59% and a net profit margin over 13% in TTM. However, the revenue growth rate has been negative recently, indicating a potential challenge in maintaining top-line growth. Despite this, the EBIT and EBITDA margins remain healthy, reflecting operational efficiency.

Balance Sheet

The balance sheet is stable with a manageable debt-to-equity ratio of 0.29 in TTM, showing a decrease from previous years, which indicates improved leverage management. Return on equity is solid at around 9.67%, though slightly lower than previous years, suggesting a need for enhanced profitability. The equity ratio indicates a strong capital structure.

Cash Flow

Cash flow analysis reveals a decline in free cash flow growth, which is a concern for future liquidity. The operating cash flow to net income ratio is moderate, indicating reasonable cash generation from operations. However, the free cash flow to net income ratio has decreased, suggesting potential challenges in cash management.

Breakdown	TTM	Dec 2024	Dec 2023	Dec 2022	Dec 2021	Dec 2020
Income Statement
Total Revenue	21.22B	21.16B	20.99B	22.23B	19.69B	17.53B
Gross Profit	12.41B	12.48B	11.67B	13.71B	12.34B	10.70B
EBITDA	5.87B	5.96B	5.68B	6.28B	5.88B	4.78B
Net Income	2.86B	2.78B	2.82B	3.33B	3.06B	1.99B
Balance Sheet
Total Assets	47.35B	51.57B	48.49B	48.53B	45.36B	41.80B
Cash, Cash Equivalents and Short-Term Investments	1.57B	2.71B	2.41B	1.64B	1.62B	1.14B
Total Debt	9.40B	10.27B	9.94B	10.40B	10.77B	12.04B
Total Liabilities	19.02B	21.58B	21.74B	22.52B	23.95B	24.78B
Stockholders Equity	28.26B	29.91B	26.68B	25.93B	21.34B	16.95B
Cash Flow
Free Cash Flow	1.78B	2.40B	1.76B	2.45B	3.19B	1.91B
Operating Cash Flow	3.81B	4.59B	3.78B	4.26B	4.62B	3.48B
Investing Cash Flow	-2.89B	-3.05B	-1.89B	-2.74B	-1.58B	-1.34B
Financing Cash Flow	-2.38B	-985.00M	-1.73B	-1.55B	-2.50B	-1.52B

Merck KGaA Technical Analysis

• Technical Analysis Sentiment: Positive
• Last Price: 120.85
• 50DMA: Positive
• 100DMA: Positive
• 200DMA: Negative
• MACD: Negative
• RSI: Neutral
• STOCH: Negative

Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For DE:MRK, the sentiment is Positive. The current price of 120.85 is above the 20-day moving average (MA) of 109.29, above the 50-day MA of 109.46, and below the 200-day MA of 121.05, indicating a neutral trend. The MACD of 1.22 indicates Negative momentum. The RSI at 65.29 is Neutral, neither overbought nor oversold. The STOCH value of 81.86 is Negative, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Positive sentiment for DE:MRK.

Merck KGaA Peers Comparison

Name	Overall Rating	Market Cap	P/E Ratio	ROE	Dividend Yield	Revenue Growth	EPS Growth
SHL	77 Outperform	€52.34B	24.23	12.29%	1.99%	5.85%	16.20%
SRT	70 Neutral	€13.83B	118.72	5.03%	0.40%	3.80%	33.31%
FRE	69 Neutral	€26.21B	23.54	6.15%	2.12%	-0.59%	―
MRK	65 Neutral	€51.17B	18.29	10.08%	1.87%	1.67%	9.02%
BIO	55 Neutral	€1.31B	-60.73	4.97%	0.11%	-18.82%	-113.85%
BAYN	50 Neutral	€28.61B	-8.29	-11.25%	0.38%	-1.99%	-169.98%
Sector *	51 Neutral	$7.86B	-0.30	-43.30%	2.27%	22.53%	-2.21%