Anne Czichos
Introduction
Merck KGaA (OTCPK:MKGAF) (OTCPK:MKKGY) was established as a pharmacy in the 17th century in Germany. Not to be confused with its US-based counterpart Merck (MRK), the German company continues to expand in its life science
Merck KGaA: Still A Bit Too Expensive
Summary
- Merck KGaA's stock remains a 'hold' due to its high valuation, trading at an earnings multiple of around 20 and a 4.5% free cash flow yield.
- The company generated 4.75B EUR in adjusted operating cash flow and 2.55B EUR in net free cash flow, equating to 5.86 EUR per share.
- Merck's 2025 guidance includes 21.5-22.9B EUR in revenue and 6.1-6.6B EUR in EBITDA, with significant growth expected in the Life Science division.
- Potential large M&A deals in the Life Science segment could be a catalyst, but the current valuation keeps me on the sidelines.
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