I would not buy Merlin at €11.58 despite its 13.3% decline over twelve months: trading close to the annual low does not, by itself, demonstrate that a margin of safety exists. The 7.9x P/E looks cheap, but contrasts with the 21.9x estimated for 2026 and 20.6x for 2027; 2025 EPS was €1.400, while €0.529 is estimated for 2026. In addition, Q2 2026 EPS of €0.81 is far above the estimated €0.130, so I would not regard it as a normalized level. Debt-to-equity of 0.54 is moderate, but the estimated dividend of €0.22 is well below the €0.42 paid in 2025. Consensus upside is no substitute for a prudent valuation. I am staying on the sidelines until there is a more reliable earnings base and a clear discount.
Translated automatically from the original in Spanish.