Deutsche Bank Downgrades Merck KGaA To "hold" After Estimate Cuts, Limited Upside
Samantha LuanDeutsche Bank downgraded Merck KGaA (ETR:MRCG) to "hold" from "buy" and raised its price target to €132 from €127, citing reduced earnings expectations and limited upside after a recent share price recovery, sending shares down over 3%.
Deutsche Bank downgraded Merck KGaA (ETR:MRCG) to "hold" from "buy" and raised its price target to €132 from €127, citing reduced earnings expectations and limited upside after a recent share price recovery, sending shares down over 3%.
In a note ahead of the company's upcoming fourth-quarter results and 2026 guidance, analyst Falko Friedrichs said Deutsche Bank cut its adjusted earnings per share estimate for 2026 by about 5%.
The reduction reflects higher foreign exchange headwinds and slightly higher interest costs than previously assumed, according to the report.
Deutsche Bank said it expects the fourth-quarter results to be largely a non-event, with investor attention likely centered on the 2026 guidance.
The brokerage said the guidance is likely to indicate another operational transition year. Friedrichs noted that the revised adjusted EPS forecast is 7% below Bloomberg consensus for 2026 and as much as 10% below consensus for the outer years.
The downgrade was driven by the gap between Deutsche Bank's estimates and consensus forecasts, as well as valuation considerations.
Friedrichs said the revised €132 target price no longer offers significant upside following a roughly 15% recovery in the share price in recent weeks. Deutsche Bank said it is waiting for a better entry point and for consensus estimates to be reset.
