HSBC Lifts Merck KGaA Rating to Buy Amid Sector-Wide Rally

Merck KGaA's stock rose 1.7% to €141.30 after HSBC upgraded its rating to Buy from Hold, naming it a preferred pick in life sciences tools.

The upgrade is based on three key factors: attractive valuation, strong growth of 4.1% in the second quarter of this year, and the stock's failure to participate in the recent sector-wide rally.

HSBC analysts pointed out that Merck KGaA's operational momentum was not reflected in its stock price, which is trading well off its 52-week high of €148.80.

The upgrade gives investors a clear reason to reassess the company's valuation and close the gap with its sector peers, according to HSBC analysts.