Morgan Stanley analyst Sarita Kapila downgraded the rating on Roche Holding AG to a Sell today, setting a price target of CHF245.00.
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Sarita Kapila’s rating is based on several factors that suggest challenges for Roche Holding AG’s future growth. The company is expected to face increased competition from both branded and biosimilar products, which could impact its base business significantly between 2027 and 2029. Additionally, recent safety and regulatory issues with new product launches such as Columvi and Elevidys have introduced a downside risk of approximately 5-6% to earnings expectations for the outer years, with 2025 anticipated as the peak year for earnings growth.
Furthermore, the upcoming Q4’25 pipeline readouts are considered high-risk, with mixed efficacy data and higher-risk clinical trial designs for products like giredestrant and fenebrutinib. This situation, combined with a lack of pipeline momentum extending into 2026 and the need for significant business development to counteract patent expiries, has led to concerns about Roche’s ability to sustain its growth. The valuation of Roche appears demanding, especially when compared to peers with stronger earnings growth, prompting a downgrade to a relative Underweight rating with a price target of CHF 245.
In another report released on July 28, Goldman Sachs also maintained a Sell rating on the stock with a CHF242.00 price target.