Merck KGaA (MRK) AI Stock Analysis

• Market Cap: €49.00B
• Dividend Yield: 1.84%
• Average Volume (3M): 321.00K
• Price to Earnings (P/E): 17.1
• Beta (1Y): 0.76
• Revenue Growth: 1.47%
• EPS Growth: 9.64%
• Country: DE
• Employees: 59,020
• Sector: Healthcare
• Sector Strength: 45
• Industry: Drug Manufacturers - Specialty & Generic
• EPS (TTM): 2.32
• Shares Outstanding: 129,242,250
• 10 Day Avg. Volume: 344,164
• 30 Day Avg. Volume: 321,004
• PEG Ratio: -12.94
• Price to Book (P/B): 2.03
• Price to Sales (P/S): 2.88
• P/FCF Ratio: 25.32
• 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: €141.29
• Price Target Upside: 18.33% Upside
• Rating Consensus: Moderate Buy
• Number of Analyst Covering: 8
• EPS Forecast (FY): N/A
• Revenue Forecast (FY): N/A

• Rating: 66 Neutral
• Price Target: €121.00 ▲(1.34% Upside)

Merck KGaA's strong financial performance is the most significant factor, supported by stable profitability and a solid balance sheet. However, negative revenue growth and declining free cash flow are notable risks. Technical indicators suggest neutral momentum, and the stock's valuation is reasonable, contributing to a moderate overall score.

Positive Factors

Strong Profitability

Strong profitability with high margins indicates efficient operations and the ability to generate substantial earnings, supporting long-term financial health.

Stable Financial Position

A stable financial position with low leverage enhances the company's resilience and ability to invest in growth opportunities.

Operational Efficiency

Healthy EBIT and EBITDA margins demonstrate effective cost management and operational efficiency, which are crucial for sustaining profitability.

Negative Factors

Declining Revenue Growth

Negative revenue growth can hinder the company's ability to expand its market presence and impact future earnings potential.

Free Cash Flow Decline

A decline in free cash flow growth may limit the company's ability to fund new projects and return capital to shareholders, affecting long-term growth.

Need for Enhanced Profitability

A slight decline in return on equity suggests a need to improve profitability to enhance shareholder value and sustain competitive advantage.

Merck KGaA Business Overview & Revenue Model

Company Description

Merck KGaA, Darmstadt, Germany, is a leading global science and technology company that operates in the healthcare, life science, and performance materials sectors. Established in 1668, it offers a wide range of products and services including prescription medicines, biopharmaceuticals, and laboratory supplies, as well as specialty chemicals for the electronics industry. The company's focus areas include oncology, immunology, fertility, and neurodegenerative diseases, alongside its extensive portfolio in research and development for biopharmaceuticals and innovative materials.

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 shows strong profitability with healthy EBIT and EBITDA margins and a stable balance sheet. However, negative revenue growth and declining free cash flow are concerns.

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: 119.40
• 50DMA: Positive
• 100DMA: Positive
• 200DMA: Positive
• 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 119.4 is above the 20-day moving average (MA) of 114.80, above the 50-day MA of 114.66, and above the 200-day MA of 115.78, indicating a bullish trend. The MACD of 1.27 indicates Negative momentum. The RSI at 62.02 is Neutral, neither overbought nor oversold. The STOCH value of 81.25 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
SRT	69 Neutral	€14.33B	94.60	5.01%	0.37%	5.82%	59.90%
FRE	69 Neutral	€26.65B	23.26	7.50%	2.11%	0.63%	―
SHL	67 Neutral	€47.61B	22.29	11.45%	2.24%	4.53%	10.12%
MRK	66 Neutral	€49.00B	17.11	10.32%	1.84%	1.47%	9.64%
Sector *	51 Neutral	$7.86B	-0.30	-43.30%	2.27%	22.53%	-2.21%
BAYN	51 Neutral	€26.28B	-7.69	-0.66%	0.33%	-1.87%	77.51%
BIO	51 Neutral	€1.35B	-61.38	―	―	-18.82%	-113.85%