| Valuation method | Value, CHF | Upside, % |
|---|---|---|
| Artificial intelligence (AI) | n/a | n/a |
| Intrinsic value (DCF) | n/a | |
| Graham-Dodd Method | 44.20 | -57 |
| Graham Formula | 147.10 | 44 |
MERCK Kommanditgesellschaft auf Aktien (Merck KGaA) is a global leader in healthcare, life sciences, and electronics, with a rich history dating back to 1668. Headquartered in Darmstadt, Germany, the company operates through three core segments: Healthcare, Life Science, and Electronics. In Healthcare, Merck develops and markets innovative pharmaceutical and biological drugs targeting neurology, immunology, oncology, fertility, and cardiometabolic diseases. The Life Science segment provides essential tools and services for research, biopharma production, and industrial applications. The Electronics segment supplies advanced materials for semiconductors, displays, and specialty chemicals. Merck KGaA's diversified portfolio and strategic alliances, including partnerships with Pfizer and Novartis, reinforce its strong market position. With CHF 22.2 billion in revenue (2022), the company is a key player in specialty pharmaceuticals and high-tech materials, driving innovation across multiple industries.
Merck KGaA presents a compelling investment case due to its diversified business model, strong innovation pipeline, and leadership in high-growth sectors like biopharma and semiconductor materials. The company reported robust financials in 2022, with CHF 3.3 billion net income and CHF 4.3 billion operating cash flow. Its dividend payout of CHF 1.85 per share reflects stable returns. However, investors should note its high total debt (CHF 10.4 billion) and exposure to cyclical electronics demand. Long-term growth drivers include its leading position in fertility treatments (e.g., Gonal-f) and cutting-edge life science tools. Regulatory risks in pharma and supply chain dependencies in electronics remain key challenges.
Merck KGaA holds a unique competitive position through its balanced exposure to healthcare, life sciences, and electronics—a rare combination among peers. In Healthcare, its neurology (e.g., Rebif) and fertility franchises face competition from Biogen and Ferring, but Merck's integrated R&D and manufacturing provide cost advantages. The Life Science segment competes with Thermo Fisher and Danaher in lab supplies, where Merck's MilliporeSigma brand offers strong customer loyalty. In Electronics, its liquid crystals and semiconductor materials compete with JSR and Shin-Etsu, but Merck's vertical integration and IP portfolio create barriers to entry. Strategic collaborations (e.g., with MoonLake in immunology) enhance its innovation capacity. However, the company lags behind pure-play pharma giants in scale (e.g., Roche, Novartis) and faces pricing pressure in generics. Its German engineering heritage supports premium product positioning but may limit cost flexibility versus Asian electronics material suppliers.