HSBC Upgrades Merck KGaA to Buy on Attractive Valuation

HSBC has upgraded Merck KGaA to 'Buy' from 'Hold', citing attractive valuation and strong growth prospects.

The analysts led by Shubhangi Gupta noted that Merck posted one of the highest growth rates in tools during the first half of 2026, yet its shares have not participated in the recent sector rally. They attribute this to potential de-stocking and acquisition value accretion concerns in the second half.

However, they expect acceleration in the company's electronics segment to offset some of the softness in tools. Merck has historically been prudent in its M&A efforts, but the analysts were 'unconvinced' regarding the return accretion potential from the Bio-Techne deal.