Merck Stock: Signs of Recovery After Prolonged Slump

Darmstadt-based pharmaceutical and technology company Merck is showing early signs of technical stabilization after a prolonged period of weakness. Currently trading at approximately €141.25, the stock has underperformed the broader market, declining more than 10% year-to-date while the DAX has gained roughly 16%. However, recent quarterly results suggest a potential turnaround. In the fourth quarter, Merck achieved organic revenue growth of 3.8% and an impressive 19.7% increase in adjusted EBITDA. For the full year, revenue reached €21.2 billion, representing 2% organic growth, while adjusted EBITDA rose by 6.9% to €6.1 billion. Despite these positive developments, net profit decreased slightly by 1.7% to €2.79 billion. The company plans to maintain its dividend at €2.20 per share. Analysts remain optimistic, with an average price target of €183.14, substantially above current trading levels.

Positive Outlook for 2025

CEO Belen Garijo expressed confidence in Merck's future performance, projecting profitable growth across all business segments in 2025. The company forecasts organic revenue growth of 3-6%, targeting between €21.5 and €22.9 billion, with adjusted EBITDA expected to increase organically by 3-8% to €6.1-6.6 billion. Strategic investments in semiconductor materials for AI chip systems are performing particularly well, while the laboratory business has shown clear signs of recovery since mid-2024. Additionally, Merck recently confirmed discussions regarding a potential acquisition of US cancer specialist Springworks Therapeutics, which could strengthen its pharmaceutical division following setbacks in clinical studies of two promising candidates.