MERCK KGAA (+) : Toughest quarter navigated. FY26 guidance raised. New CEO steps up.

Research evidence excerpt

MERCK KGAA (+) : Toughest quarter navigated. FY26 guidance raised. New CEO steps up.

EQUITIES

PHARMACEUTICALS

MERCK KGAA OUTPERFORMPRICE* EUR113.0  TARGET PRICE EUR145 (UPSIDE 28%)

FLASH NOTE

Toughest quarter navigated. FY26 guidance raised. New CEO steps up.

13 MAY 2026 Securities Research Report Production time: 15:58* (London time)

Research Analyst & Publishing Entities

Peter Verdult, CFA BNP Paribas London Branch (+44) 203 430 8683 peter.verdult@uk.bnpparibas.com

What happened?

The new CEO used the Q1 call to lay out the revised Strategic framework and reiterate mid-term targets (MSD revenue

growth with an EBITDA margin stepping up towards 30%). With zero US sales going forward assumed for Mavenclad

and Pergoveris, earnings risk in 2026 still lies to the upside in our view. Key focus topics during the Q&A included M&A,

Life Sciences trends, Pharma R&D outlook, and Fertility. We reiterate our Outperform rating (see Better across the

board - 2026 rerating?) and after a number of fallow years anticipate investor interest to further build from here. Our

bull-bear valuation range is €234-77.

BNPP View:

We like the setup for the remainder of the year and argue the shares can further rerate on an improving narrative across

the group and further scope for positive earnings revisions. Q1 highlights include 16% CER growth at Process Solutions

(underlying >10% once stocking benefits taken into account) and clear evidence of market conditions across Life

Sciences improving as well as clear evidence the commercial model changes implemented in January are having an

impact. Electronics benefited from two one-offs that had been flagged going into Q1 (€43m disposal gain from OLED

patents and a €25m supplier contract dispute resolution) with DSS finally stabilising.