Barclays downgraded Merck KGaA (ETR:MRCG) to “equal weight” from “overweight” following weaker second-quarter results and a cut to its full-year 2025 guidance, in a note dated Tuesday.
The downgrade came with a reduced price target of €120, down 20% from €150, after Barclays applied a higher conglomerate discount of 20% compared with 15% previously.
The brokerage cited several factors behind the move. Merck lowered its 2025 sales guidance after pushing out its semiconductor recovery timeline, while also divesting its Surface Solutions unit.
In addition, foreign exchange headwinds weighed on results, though this was partly offset by improved margin expectations in Life Sciences and Healthcare.
Barclays cut its sales outlook for 2025-2027 by about 2% each year, and trimmed EBITDA pre-forecast by 2-3% to reflect the new portfolio mix and guidance.
Barclays highlighted a series of near-term risks that could drag on sentiment, including the potential early entry of U.S. generics for Mavenclad in 2025, competitive pressure on Ogsiveo from Immunome’s Varegacestat, delayed demand recovery in semiconductors, uncertainty in Life Sciences growth, and pending strategic reviews of the Healthcare and Life Sciences divisions.
The bank also pointed to possible management changes, with CEO Belén Garijo’s contract ending in 2026 and speculation over succession.
Merck’s 2025 sales are now forecast at €21.1 billion, in line with company guidance but flat compared with 2024, while EBITDA pre is projected at €6.0 billion, a 2% drop versus Barclays’ earlier estimates. Earnings per share for 2025 were also revised down to €8.25 from €8.56.
Barclays downgraded Merck KGaA (ETR:MRCG) to “equal weight” from “overweight” following weaker second-quarter results and a cut to its full-year 2025 guidance, in a note dated Tuesday.
The downgrade came with a reduced price target of €120, down 20% from €150, after Barclays applied a higher conglomerate discount of 20% compared with 15% previously.
The brokerage cited several factors behind the move. Merck lowered its 2025 sales guidance after pushing out its semiconductor recovery timeline, while also divesting its Surface Solutions unit.
In addition, foreign exchange headwinds weighed on results, though this was partly offset by improved margin expectations in Life Sciences and Healthcare.
Barclays cut its sales outlook for 2025-2027 by about 2% each year, and trimmed EBITDA pre-forecast by 2-3% to reflect the new portfolio mix and guidance.
Barclays highlighted a series of near-term risks that could drag on sentiment, including the potential early entry of U.S. generics for Mavenclad in 2025, competitive pressure on Ogsiveo from Immunome’s Varegacestat, delayed demand recovery in semiconductors, uncertainty in Life Sciences growth, and pending strategic reviews of the Healthcare and Life Sciences divisions.
The bank also pointed to possible management changes, with CEO Belén Garijo’s contract ending in 2026 and speculation over succession.
Merck’s 2025 sales are now forecast at €21.1 billion, in line with company guidance but flat compared with 2024, while EBITDA pre is projected at €6.0 billion, a 2% drop versus Barclays’ earlier estimates. Earnings per share for 2025 were also revised down to €8.25 from €8.56.
Source :
https://www.investing.com/news/stock-market-news/barclays-cuts-merck-kgaa-to-equal-weight-trims-price-target-to-120-4199316
