MERCK KGAA (+) : AInflection story. Earnings upgrade cycle begins

Research evidence excerpt

MERCK KGAA (+) : AInflection story. Earnings upgrade cycle begins

EQUITIES

PHARMACEUTICALS

MERCK KGAA OUTPERFORMPRICE* EUR117.8  TARGET PRICE EUR155 (UPSIDE 32%) TARGET 7%PRICE EPS 2%26e EPS 1%27e

AInflection story. Earnings upgrade cycle begins

We put through sales/EPS upgrades of up to 2/6% post Q1 with 2025-30e EPS forecasts up to 18%19 MAY 2026

Securities Research Report ahead of consensus. Our revised TP rises 7% to €155, reflecting a mix of PE (target 2027 multiple

Production time: 05:34* (London time)

13x), SOTP and DCF valuations. We see an improving narrative across the group and anticipate

Research Analysts & Publishing Entities

balance sheet deployment (€10-15bn firepower) to accelerate with a likely focus on Pharma pipeline

Peter Verdult, CFA and Life Sciences. Bull-bear valuation €233-101.BNP Paribas London Branch

(+44) 203 430 8683

peter.verdult@uk.bnpparibas.com Narrative improving across the board…

We argue the shares can continue to rerate on an improving narrative across the group. Electronics

Victor Floch

(17/13% of sales/EBITDA) is the most likely driver of near-term upside given SemiconductorBNP Paribas London Branch

(+44) 203 430 8707 exposure (near 80% of Electronics). Longer term we see Merck’s exposure to smart glasses being

victor.floch@uk.bnpparibas.com underappreciated. The new commercial model at Life Sciences (43/47% of sales/EBITDA) is already

Kirsty Ross-Stewart bearing fruit. With zero US sales going forward assumed for Mavenclad and Pergoveris, earnings

BNP Paribas London Branch risk in 2026 still lies to the upside in our view. The shift at Healthcare towards Rare Disease will

(+44) 203 430 8452 accelerate with the launch of pimicotinib and likely business development.kirsty.ross-stewart@uk.bnpparibas.com

Angelin Roy What next?