EU Life Sci: Thoughts post-DHR; Opportunity in SRT, Diagnostics Risks Remain

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EU Life Sci: Thoughts post-DHR; Opportunity in SRT, Diagnostics Risks Remain

messages into results, with no FY26 guidance raise Potential Upside/Downside +32.1%

Source: Bloomberg, Barclays Research

currently priced in into the shares, we see a positive risk/reward into results (BARC Preview).

For MRK (EW, €135): Noting the better-than-expected Life Sciences results and FY26 guidance, BIOX.PA/BIM FP EQUAL WEIGHT

driven by improved instrument demand and stabilised A&G funding, we see this as supportive of European Pharmaceuticals,

Biotechnology & Life NEUTRAL

MRK's DS/AS division which accounts for ~50% of its Life Science revenues. However, MRK's Sciences

relatively higher exposure to resins and limited equipment offering could leave it more exposed Price Target EUR 80.00

on the PS side. We therefore see the broadly neutral response in shares as well justified Price (21-Jul-26) EUR 70.40

(-0.5% vs SXDP +0.2%) Potential Upside/Downside +13.6%

For BIM (EW, €80)/DIA (UW, €60): DHR delivered strong LDD% growth in clinical diagnostics,

noting stabilising China headwinds and strong non-respiratory performance for Cepheid, MRCG.DE/MRK GR EQUAL WEIGHT

benefitting from good take-up of the Xpert GI Panel and key hospital account wins. However, European Pharmaceuticals,

poor respiratory Dx growth drove a reduction in FY26 guidance. Given the risk of broader sector Sciences

FY26 guidance downgrades on low respiratory activity, coupled with rising non-resp Price Target EUR 135.00

Price (21-Jul-26) EUR 134.25

Potential Upside/Downside +0.6%

Barclays Capital Inc. and/or one of its affiliates does and seeks to do business with companies Source: Bloomberg, Barclays Research

covered in its research reports. As a result, investors should be aware that the firm may have a