All 3 divisions to grow, but we moderate our assumptions on the pace of recovery We have updated our model based on 3Q trends and Merck''s recent CMD. Although the CMD painted a confident picture on Merck''s future growth and the long-term Life Science outlook, we have moderated our assumptions on the pace of recovery and margin development for both Life Science and Electronics. Our 2025-28 sales/EBITDA pre are 2-6% below VA consensus. Lowering forecasts on pace of LS and Electronics recovery; 2024-28 EPS CAGR = 7% We lower our previously above-consensus 2024-28E sales, EBITDA and Core EPS estimates by 1-9%, reflecting a slower pace of recovery of Merck''s Life Science and Electronics divisions. We assume 2025 remains a ''bridging year'' for Life Science, with FY growth modestly below Merck''s mid-term 7-9% target and only modest margin improvement pending improved capacity utilisation. 3Q preview; return to growth expected; EBITDA pre underpinned by strong HC performance We expect Merck to deliver 3Q CER growth in sales/EBITDA of 3%/12% underpinned by very strong HC EBITDA growth due to lower RandD spend. Our EBITDA forecasts are in-line with VA consensus but are below on Life Science and Electronics sales, with low single digit growth putting each on track for the low end or slightly below current full year guidance ranges. We expect Group guidance to be reiterated but with this at the lower end of current ranges. Reiterate Neutral, TP to EUR160; return to earnings upgrades needed for upside Our 2025 Core EPS forecasts put Merck KGaA on 17x 2025 PE in return for a 2024-28 EPS CAGR of 7%. Our TP is based on a blend of DCF and EV/EBITDA SOTPs, with a 15% conglomerate discount applied, which we believe is unlikely to be lifted unless the outlook for Healthcare improves or we return to an upgrade cycle for Life Sciences, which seem unlikely near-term.