Fact based stock research
Merck (DE) (XTRA:MRK)

DE0006599905

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For every stock, we judge its performance against its peers and rank it on a scale of 1 to 100. The higher the rank, the better the stock performs than its peers. And, we do this for six investment strategies:
Value - shows how good of a value the stock is. Green is "inexpensive"; red is "expensive".

Growth - shows a company's growth potential. Green is "high growth" expected; red is "tough times ahead".

Safety - relates to the amount of debt a company has. Green is low debt level; red is high debt level.

Combined Financial - this isn't an average of the first three ranks but rather a consolidated view across several financial indicators. Green = good; red = tread carefully.

(NEW) Sentiment - quantifies professional analyst ratings and holdings as well as market pulse. Green = positive sentiment; red = skepticism (Only available to Premium Subscribers).

(NEW) 360° View - the ultimate rating with all financial and non-financial indicators.

Merck (DE) stock research in summary

merckgroup.com

ANALYSIS: With an Obermatt Combined Rank of 29 (worse than 71% compared with investment alternatives), Merck (DE) (Pharmaceuticals, Germany) shares have somewhat below-average financial characteristics compared with similar stocks. Shares of Merck (DE) are a good value (attractively priced) with a consolidated Value Rank of 68 (better than 68% of alternatives) but show below-average growth (Growth Rank of 10), and are riskily financed (Safety Rank of 42), which means above-average debt burdens. ...read more

RECOMMENDATION: A Combined Rank of 29, is a hold recommendation based on Merck (DE)'s financial characteristics. As the company Merck (DE)'s key financial metrics exhibit good value (Obermatt Value Rank of 68) but low growth (Obermatt Growth Rank of 10) and risky financing practices (Obermatt Safety Rank of 42), it may be a risky investment, because debt in times of crises can make things worse. The good value, better than 68% of comparable companies, may indicate the company's future is challenging. If you believe that low growth is temporary or just due to a specific current event, you may conclude that the good value of the stock provides an attractive investment opportunity. Obermatt Premium subscribers can further check the stock’s Sentiment Ranks, which also flow into the Obermatt 360° View for investors. ...read more

Latest Obermatt Ranks


360° View^new
Sentiment Rank^new
Value Rank	68
Growth Rank	10
Safety Rank	42
Combined Rank	29

Country	Germany
Industry	Pharmaceuticals
Index	CDAX, DAX 40, Low Emissions, Employee Focus EU, Human Rights
Size class	XX-Large

This stock has achievements: Insight 2022-11-10.

19-Dec-2024. Stock data may be delayed. Log in or sign up to get the most recent research.

Further information

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Analysts rarely agree on a stock’s future. So, who do you believe? Obermatt translates those collective views into a single Sentiment Rank. That plus the financial ranks give you the ultimate 360° View. Sign up to access them.

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Review the performance ranks of the individual metrics that form each investment strategy.

Research History: Merck (DE)

RESEARCH HISTORY	2021	2022	2023	2024
VALUE
VALUE	7	70	85	68
GROWTH
GROWTH	85	89	1	10
SAFETY
SAFETY	41	6	44	42
SENTIMENT
SENTIMENT	n/a	44	24	^new
360° VIEW
360° VIEW	n/a	50	16	^new

Most recent update of the stock research: 19-Dec-2024. Financial reporting date used for calculating ranks: 30-Sep-2024. Stock research history is based on the Obermatt Method. The higher the rank, the better Merck (DE) is in the corresponding investment strategy.
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Combined financial peformance in Detail

RESEARCH HISTORY	2021	2022	2023	2024
VALUE
VALUE	7	70	85	68
GROWTH
GROWTH	85	89	1	10
SAFETY
SAFETY	41	6	44	42
COMBINED
COMBINED	31	59	30	29

Last update of combined financial performance: 19-Dec-2024. Stock analysis on combined financial performance: The higher the rank of Merck (DE) the better the performance.

Value Metrics in Detail

ANALYSIS: With an Obermatt Value Rank of 68 (better than 68% compared with alternatives), Merck (DE) shares are more attractively priced than the majority of comparable stocks. The Value Rank is based on consolidating four value indicators, with half of the indicators below and half above average for Merck (DE). Price-to-Profit (also referred to as price-earnings, P/E) is 58 which means that the stock price compared with what market professionals expect for future profits is lower than for 58% of comparable companies, indicating a good value concerning Merck (DE)'s profit levels. The same is valid for Price-to-Book Capital (also referred to as market-to-book ratio) with a Price-to-Book Rank of 66, which means that the stock price is lower as regards to invested capital than for 66% of comparable investments. On the other hand, Price-to-Sales is less favorable than for 54% of alternatives (only 46% of peers have an even less favorable ratio). The same is valid for dividend yield, which is lower than for 53% of comparable companies, making the stock more expensive compared with the company's expected dividend payouts. ...read more

RECOMMENDATION: The overall picture with a consolidated Value Rank of 68, is a buy recommendation based on Merck (DE)'s stock price compared with the company's operational size and dividend yields. This is a puzzling picture, because it means that profits are high while dividends are low. Since the stock price is low compared with invested capital but high concerning expected revenues, the company has more invested capital than peers for generating the same amount of revenue. Since profits are higher, it could be a "cash cow" situation (using the classic Boston Consulting Group or BCG matrix naming convention) where the company is on a downward trend, still living from the profits of past products. As the company pays low dividends, it may harbor the opinion that a turnaround is possible, and it rather invests the cash than distribute it to shareholders through dividends, thus sealing the company's fate early. Any investment optimism should only be a buy trigger once thorough research is completed. We recommend further analyzing the stock with Obermatt’s Value, Safety, and Sentiment Ranks, including the 360° View, before making an investment decision, which is especially important in this case, as the financial indicators are inconclusive. ...read more

VALUE METRICS	2021	2022	2023	2024
PRICE VS. REVENUES (P/S)
PRICE VS. REVENUES (P/S)	16	91	93	46
PRICE VS. PROFITS (P/E)
PRICE VS. PROFITS (P/E)	25	56	60	58
PRICE VS. CAPITAL (Market-to-Book)
PRICE VS. CAPITAL (Market-to-Book)	24	48	63	66
DIVIDEND YIELD
DIVIDEND YIELD	17	53	57	47
CONSOLIDATED RANK: VALUE
CONSOLIDATED RANK: VALUE	7	70	85	68

Last update of Value Rank: 19-Dec-2024. Stock analysis on value ratios: The higher the rank, the lower the value ratio of Merck (DE); except for dividend yield where the rank is higher, the higher the yield.

Growth Metrics in Detail

ANALYSIS: With an Obermatt Growth Rank of 10 (better than 10% compared with alternatives), Merck (DE) shows one of the most restricted growth dynamics in its industry. There is little momentum in this company. The Growth Rank is based on consolidating four value indicators, with all four metrics below average for Merck (DE). Sales Growth has a rank of 39, which means that currently professionals expect the company to grow less than 61% of its competitors. The same is valid for Profit Growth, with a rank of 35, and Capital Growth with 17. In addition, Stock Returns have a below market rank of 40, which means that the stock returns have recently been below 60% of alternative investments. ...read more

RECOMMENDATION: The overall picture with a consolidated Growth Rank of 10, is a sell recommendation for growth and momentum investors. These are all bad growth momentum indicators. These are negative signals for investors interested in growth companies. Value is likely good for this company, as investors may have left this stock in the cold. If that is the case, investors should look at the company's outlook, especially Sentiment performance, because it may be a turnaround situation that could entail above-average stock returns in the future. But it remains a risky bet, as no growth signals are in the green zone yet. While momentum is a popular investment factor, the value aspect might be the more important one, in the longer term. We recommend analyzing the stock with Obermatt’s Value, Safety, and Sentiment Ranks to arrive at a 360° View of the stock purchase case, especially since the growth performance is low here. ...read more

GROWTH METRICS	2021	2022	2023	2024
REVENUE GROWTH
REVENUE GROWTH	59	53	18	39
PROFIT GROWTH
PROFIT GROWTH	67	67	22	35
CAPITAL GROWTH
CAPITAL GROWTH	n/a	68	28	17
STOCK RETURNS
STOCK RETURNS	90	90	30	40
CONSOLIDATED RANK: GROWTH
CONSOLIDATED RANK: GROWTH	85	89	1	10

Last update of Growth Rank: 19-Dec-2024. Stock analysis on growth metrics: The higher the rank, the higher the growth and returns of Merck (DE).

Safety Metrics in Detail

ANALYSIS: With an Obermatt Safety Rank of 42 (better than 42% compared with alternatives), the company Merck (DE) has financing practices on the riskier side, which means that their overall debt burden is above the industry average. This doesn't mean that the business of Merck (DE) is also risky, it only means that the company is on the riskier side in respect to bankruptcy in case things turn sour, assuming that public reporting is correct. The Safety Rank is based on consolidating three financing indicators, with two out of three indicators above average for Merck (DE). Leverage is at a rank of 55, meaning the company has a below-average debt-to-equity ratio. It has less debt than 55% of its competitors. Liquidity is also good at a rank of 63, meaning the company generates more profit to service its debt than 63% of its competitors. This indicates that the company is on the safer side when it comes to debt service. But Refinancing is lower at a rank of 26, which means that the portion of the debt that is about to be refinanced is above-average. It has more debt in the refinancing stage than 74% of its competitors. ...read more

RECOMMENDATION: With a consolidated Safety Rank of 42 (worse than 58% compared with alternatives), Merck (DE) has a financing structure that is riskier than that of its competitors. The refinancing issues could be a short-term problem, especially if the company has reputation issues. Banks and investors don't like to refinance debt if there are clouds on the horizon. For this reason, investors should look at the refinancing environment for Merck (DE). Does it look safe that debt that is coming due can be covered with new debt? If that is the case, then the financing situation of the company is on the safer side. If not, it may be better to wait until refinancing has been completed and the Refinancing rank is good again. Investors may have a short-term debt challenge with Merck (DE) and should also compare Obermatt’s Value, Growth, and Sentiment Ranks before making a decision. ...read more

SAFETY METRICS	2021	2022	2023	2024
LEVERAGE
LEVERAGE	52	15	42	55
REFINANCING
REFINANCING	40	14	37	26
LIQUIDITY
LIQUIDITY	39	39	64	63
CONSOLIDATED RANK: SAFETY
CONSOLIDATED RANK: SAFETY	41	6	44	42

Last update of Safety Rank: 19-Dec-2024. Stock analysis on safety metrics: The higher the rank, the lower the leverage of Merck (DE) and the more cash is available to service its debt.

Sentiment Metrics in Detail

SENTIMENT	2021	2022	2023	2024
ANALYST OPINIONS
ANALYST OPINIONS	n/a	43	75	^new
OPINIONS CHANGE
OPINIONS CHANGE	n/a	48	36	^new
PRO HOLDINGS
PRO HOLDINGS	n/a	38	30	^new
MARKET PULSE
MARKET PULSE	n/a	63	25	^new
CONSOLIDATED RANK: SENTIMENT
CONSOLIDATED RANK: SENTIMENT	n/a	44	24	^new

Last update of Sentiment Rank: 19-Dec-2024. Stock analysis on sentiment metrics: The higher the rank, the more positive the sentiment for Merck (DE).
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