Risk Reward Update

Research evidence excerpt

Risk Reward Update

Update

July 27, 2026 03:00 AM GMT

Morgan Stanley & Co. International plc+MMerck KGaA | Europe Thibault Boutherin

Equity Analyst

Risk Reward Update Thibault.Boutherin@morganstanley.com +44 20 7425-9688

Merck KGaA (MRCG.DE, MRK GY)

What’s Changed Pharmaceuticals | Germany

Updated Components Stock Rating Equal-weight

EPS Industry View In-Line

Price target €135.00

Shr price, close (Jul 24, 2026) €139.15

Risk Reward for Merck KGaA (MRCG.DE) has been updated 52-Week Range €148.65-100.70

Fiscal Year Ending 12/25 12/26e 12/27e 12/28e

Reason for change EPS (€)** 8.34 8.31 8.69 9.77

Prior EPS (€)** - 8.13 8.60 9.48

We update our model ahead of Q2'26 results and make changes reflecting better FX

Unless otherwise noted, all metrics are based on Morgan Stanley ModelWare

and latest business dynamics. We expect a solid Q2'26 across the three divisions. framework

** = Based on consensus methodology

Healthcare should benefit from a milder US Mavenclad erosion (only 2 generics on e = Morgan Stanley Research estimates

the market in Q2'26) and continued growth of Mavenclad ex-US benefiting margins

(MSe 34.0%). For Life Science, we expect another quarter of strong growth for

bioprocessing (MSe +14%), with some of the tailwinds seen in Q1'26 continuing in

Q2'26; we expect +4% for Advanced Solutions and +1% for Discovery solutions; we

expect LS margins to benefit from operating leverage (MSe 29.5%). We expect

Electronics to be supported by continued strength in Semiconductor solutions. We

see scope for Merck to raise the guidance for Healthcare (current guidance excludes

Mavenclad sales after Q1'26), Life Science (supported by positive outlook in

particular for bioprocessing) and potentially for Electronics assuming improved

visibility improved on H2'26.