Merck raises 2026 profit guidance, beats quarterly estimates

Merck KGaA raised its 2026 core profit guidance, citing strong demand for semiconductor materials and drug production supplies, driven by growing AI-related spending.

Germany's Merck KGaA raised its 2026 core profit guidance and beat quarterly expectations on Thursday, helped by continued strong demand for semiconductor materials and drug production supplies.

The diversified family-controlled group said it expects adjusted earnings before ‌interest, taxes, depreciation and amortisation (EBITDA) of between 5.9 billion euros and 6.3 billion euros ($6.8 billion-$7.3 billion) in 2026, up ‌from previous guidance of between 5.7 billion euros and 6.1 billion euros. Quarterly adjusted EBITDA rose 9.4% to 1.60 billion euros, above analysts' average estimate of 1.53 billion euros, according to a company-provided poll.

CEO Kai Beckmann told reporters that growing AI-related spending is a driver of ⁠the company's ​semiconductor business. As a supplier ⁠to the semiconductor industry, Merck manufactures specialty materials and chemical solutions used to produce advanced microchips that underpin AI applications and data centres.

Beckmann said ⁠demand remained strong, with customers continuing to report capacity bottlenecks for AI-related technologies. He added that Merck raised its 2026 guidance based ​on robust operating performance and easing foreign exchange headwinds.

Shares in Merck, which have gained almost 20% ⁠since the start of the year, were up around 1% as of 0936 GMT. Analysts at Jefferies said Merck delivered a strong quarterly report ⁠and ​added that they expect investors to welcome the guidance hike.

"Given the strong set of results and FY guidance upgrade, we expect the shares to outperform by a couple of percentage points," analysts at J.P. Morgan ⁠said. In June, Merck boosted its Life Science unit, which makes drug research and manufacturing tools, by striking an $11.3 billion deal ⁠to buy Bio-Techne, its ⁠biggest transaction in more than a decade.

"The proposed acquisition of Bio-Techne would add additional differentiated capabilities across research, bioprocessing and advanced therapeutics," Merck said on Thursday. ($1 = 0.8660 euros)