Merck KGaA: Waiting for more visiblity in the short term, we remain at Neutral
NEUTRAL, Fair Value EUR126 (+3%)
Following the announcement of Matthias Zachert leaving, the Merck Group CFO to join Lanxess AG as CEO, the share price dropped by 7.80% compared to the DAX up +2.88%. Even though we consider that the reorganisation (and transformation) of the group was mainly driven by him, this aspect is now over. Today, Merck KGaA starts the second step of its Fit for 2018 programme, i.e. answering the long-term growth question. Although the share price is becoming attractive (P/E14 13.4x), we maintain our Neutral recommendation in the short term before the closing of AZ Materials as well as the appoinment of the CFO successor which will give more visibility on the stock and could lead to a re-rating.
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