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Lonza Group Ltd
(LONN)
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Rating:56Neutral
Price Target:
CHF600.00
▲(10.42% Upside)
Action:Downgraded
Date:01/30/26
The score is held back mainly by weak technicals (trading below major moving averages) and mixed fundamentals, particularly the low cash-flow quality in the provided statements. These are partially offset by a solid balance sheet and a notably positive earnings outlook with margin-expansion guidance and strong contracting/cash progress.
Positive Factors
Contracting Momentum & Revenue Visibility
Signing >CHF10bn of contracts in 2025 creates multi-year revenue visibility that is durable for CDMO models. Contract backlog smooths future cash and production planning, lowers sales volatility, and supports long-term utilization of high-capex assets and returns on recent capacity investments.
Negative Factors
Persistent Negative Free Cash Flow
Despite strong operating cash inflows, repeated negative free cash flow (including -204M in 2025) shows capital spending and working-capital use exceed cash from operations. Persisting FCF deficits constrain discretionary spending, dividends, or deleveraging and may force higher external financing if not reversed.
Read all positive and negative factors
Positive Factors
Negative Factors
Contracting Momentum & Revenue Visibility
Signing >CHF10bn of contracts in 2025 creates multi-year revenue visibility that is durable for CDMO models. Contract backlog smooths future cash and production planning, lowers sales volatility, and supports long-term utilization of high-capex assets and returns on recent capacity investments.
Read all positive factors
Lonza Group Ltd (LONN) vs. iShares MSCI Switzerland ETF (EWL)
Market Cap
CHF39.69B
Dividend Yield0.75%
Average Volume (3M)125.05K
Price to Earnings (P/E)―
Beta (1Y)1.08
Revenue Growth-0.65%
EPS Growth-143.04%
CountryCH
Employees18,289
SectorGeneral
Sector StrengthN/A
IndustryBiotechnology
Share Statistics
EPS (TTM)-3.92
Shares Outstanding70,229,020
10 Day Avg. Volume135,283
30 Day Avg. Volume125,051
Financial Highlights & Ratios
PEG Ratio0.77
Price to Book (P/B)4.13
Price to Sales (P/S)5.78
P/FCF Ratio-185.02
Enterprise Value/Market CapN/A
Enterprise Value/RevenueN/A
Enterprise Value/Gross ProfitN/A
Enterprise Value/EbitdaN/A
Forecast
1Y Price Target
CHF692.33Price Target Upside27.41% Upside
Rating ConsensusStrong Buy
Number of Analyst Covering6
EPS Forecast (FY)17.66
Revenue Forecast (FY)CHF7.11B
Lonza Group Ltd Business Overview & Revenue Model
Company Description
Lonza Group AG, together with its subsidiaries, operates as a contract development and manufacturing organization for pharma and biotech companies in Europe, North and Central America, Latin America, Asia, Australia, New Zealand, and international...
How the Company Makes Money
Lonza makes money primarily by providing fee-based contract development and manufacturing services to life science customers (pharma and biotech companies) who outsource parts of their R&D-to-commercial production activities. Its core revenue mode...
Lonza Group Ltd Earnings Call Summary
Earnings Call Date:Jan 28, 2026
(Q4-2025)
| % Change Since: |
Next Earnings Date:Jul 22, 2026
Earnings Call Sentiment Positive
The call presented a predominantly positive operational and financial picture: robust revenue growth (+21.7% CC), meaningful margin expansion (CORE EBITDA 31.6%, +1.4pp), strong cash generation (CHF 545m FCF), successful Vacaville integration, and clear 2026 guidance (11%–12% CC sales growth; CORE EBITDA >32%). Challenges were noted—operational issues in Cell & Gene and a small decline in Specialized Modalities, some platform mix dilution in Integrated Biologics, FX headwinds (~2.5pp), and continued high multi-year CapEx needs—but these were framed as manageable with remediation plans, maturation of projects, and disciplined capital allocation. Overall, the positive achievements and forward guidance substantially outweigh the contained challenges.Positive Updates
Strong Revenue Growth
Continuing Lonza CDMO business delivered CHF 6.5 billion in sales for FY2025, an increase of CHF 1.0 billion versus FY2024 and +21.7% in constant currencies, ahead of upgraded guidance (20%–21%).
Negative Updates
Specialized Modalities Softness (Cell & Gene)
Specialized Modalities finished 2025 with a small sales decline of about -3%; Cell & Gene experienced operational performance issues during 2025 that dampened growth and required remediation (management expects improvement in 2026).
Read all updates
Q4-2025 Updates
Positive
Negative
Strong Revenue Growth
Continuing Lonza CDMO business delivered CHF 6.5 billion in sales for FY2025, an increase of CHF 1.0 billion versus FY2024 and +21.7% in constant currencies, ahead of upgraded guidance (20%–21%).
Read all positive updates
Company Guidance
Lonza guided to 2026 constant‑currency sales growth of 11–12% with CORE EBITDA margin expanding to well above 32% (entering the 32–34% mid‑term corridor earlier than originally planned); CapEx is expected in the high‑teens % of sales for 2026 (normalizing to mid‑to‑high‑teens over the mid‑term). Management flagged an FX headwind of roughly 2% based on mid‑January rates (about 2.5% after recent moves), reiterated continued strong demand and regionalization, and pointed to cash progress (continuing‑business free cash flow CHF 545m in 2025) plus a sizeable pipeline (23 growth CapEx projects totaling CHF 7bn and >CHF 10bn of contracts signed in 2025); Vacaville contributed ~CHF 0.6bn in 2025 and is expected to sustain current revenue levels through 2028 while ramping to full potential in the early 2030s.Lonza Group Ltd Financial Statement Overview
Summary
Income Statement
63
Positive
Balance Sheet
74
Positive
Cash Flow
41
Neutral
| Breakdown | Dec 2025 | Dec 2024 | Dec 2023 | Dec 2022 | Dec 2021 |
|---|---|---|---|---|---|
Income Statement | |||||
| Total Revenue | 6.53B | 6.57B | 6.72B | 6.22B | 5.41B |
| Gross Profit | 2.31B | 2.16B | 1.95B | 2.44B | 2.11B |
| EBITDA | 1.31B | 1.54B | 1.53B | 2.12B | 1.38B |
| Net Income | 949.00M | 636.00M | 654.00M | 1.22B | 2.94B |
Balance Sheet | |||||
| Total Assets | 18.97B | 19.73B | 16.85B | 17.36B | 16.46B |
| Cash, Cash Equivalents and Short-Term Investments | 719.00M | 1.71B | 1.67B | 2.22B | 3.18B |
| Total Debt | 4.54B | 5.12B | 3.13B | 2.59B | 2.75B |
| Total Liabilities | 9.78B | 10.35B | 7.34B | 6.69B | 6.64B |
| Stockholders Equity | 9.13B | 9.33B | 9.45B | 10.60B | 9.75B |
Cash Flow | |||||
| Free Cash Flow | -204.00M | -143.00M | -263.00M | -833.00M | -126.00M |
| Operating Cash Flow | 1.17B | 1.27B | 1.39B | 1.04B | 1.22B |
| Investing Cash Flow | -732.00M | -2.92B | -1.10B | -991.00M | 1.02B |
| Financing Cash Flow | -755.00M | 1.28B | -152.00M | -286.00M | -1.28B |
Lonza Group Ltd Technical Analysis
Positive
543.40
Price Trends
514.13
Positive
506.54
Positive
520.79
Positive
Market Momentum
22.18
Negative
74.26
Negative
77.35
Neutral
Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For CH:LONN, the sentiment is Positive. The current price of 543.4 is below the 20-day moving average (MA) of 552.09, above the 50-day MA of 514.13, and above the 200-day MA of 520.79, indicating a bullish trend. The MACD of 22.18 indicates Negative momentum. The RSI at 74.26 is Negative, neither overbought nor oversold. The STOCH value of 77.35 is Neutral, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Positive sentiment for CH:LONN.
Lonza Group Ltd Peers Comparison
UnderperformOutperform
Sector (55)
Name | Overall Rating | Market Cap | P/E Ratio | ROE | Dividend Yield | Revenue Growth | EPS Growth |
|---|---|---|---|---|---|---|---|
77 Outperform | CHF5.65B | 37.19 | 9.76% | 1.43% | 14.84% | 23.77% | |
74 Outperform | CHF223.49B | 21.72 | ― | 3.18% | -4.75% | -1.04% | |
66 Neutral | CHF28.68B | 37.80 | 2.64% | 1.02% | 0.80% | 28043.55% | |
62 Neutral | CHF27.08B | 41.27 | 3.69% | 0.44% | -3.08% | -33.39% | |
62 Neutral | CHF3.29B | 19.25 | 15.79% | 0.51% | 2.57% | 4.31% | |
56 Neutral | CHF39.69B | -148.32 | ― | 0.75% | -0.65% | -143.04% | |
55 Neutral | $6.65B | 3.83 | -15.92% | 6.20% | 10.91% | 7.18% |
* General Sector Average
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Lonza Group Ltd Corporate Events
Lonza Deepens US Biopharma Partnership in Multi-Billion CHF Biologics Deal
Jul 1, 2026
Lonza has expanded its strategic collaboration with a leading US-based biopharmaceutical company, reinforcing its position as a key outsourcing partner for biologics development and manufacturing. The deal adds two new commercial biologics program...
Lonza Boosts HPAPI and Payload-Linker Capacity to Capture ADC Growth
Jun 30, 2026
Lonza plans to expand payload-linker manufacturing capacity at its Visp, Switzerland site, enhancing its drug-linker center of excellence to support surging demand in antibody-drug conjugates. The investment will add commercial-scale capabilities ...
Lonza Restates 2025 Interim Results as CHI Divestment Advances
Jun 23, 2026
Lonza has restated its Half-Year 2025 financial statements to classify its Capsules Health Ingredients business as discontinued operations, aligning interim reporting with its Full-Year 2025 accounts. The move follows a December 2024 decision to ...
Lonza Names Hans Trees Global Head of Communications
Jun 9, 2026
Lonza has appointed Hans Trees as Global Head of Communications, Senior Vice President and member of the Extended Executive Committee, effective 1 September 2026. Trees, who succeeds David Carter, brings extensive communications and leadership exp...
Lonza shareholders back board slate and raise dividend at 2026 AGM
May 8, 2026
Lonza’s 2026 Annual General Meeting saw shareholders approve all proposals from the Board, underscoring strong investor support for the company’s governance and strategy. Jean-Marc Huët was re-elected as Chairman, all incumbent di...
Lonza Posts Strong Q1, Completes Shift to Pure-Play CDMO and Confirms 2026 Outlook
May 8, 2026
Lonza reported a strong Q1 2026 performance across its pure-play CDMO operations, with momentum in Integrated Biologics, Advanced Synthesis and a return to healthy growth in Specialized Modalities. Management reiterated guidance for 2026 of 11R...
Glossary
BuyA stock rated as a "Buy" is expected to perform better than the overall market or a specific benchmark over the near-to-medium term. This rating suggests the stock is likely to deliver higher returns compared to other stocks in the same sector or market index. Note: This is not investment advice; please consult a financial advisor before making investment decisions.
HoldA stock rated as a "Hold" is expected to perform in line with the overall market or a specific benchmark. This rating indicates that the stock is neither particularly compelling nor unfavorable for investment. Note: This is not investment advice; please consult a financial advisor before making investment decisions.
SellA stock rated as a "Sell" is expected to perform worse than the overall market or a specific benchmark over the near-to-medium term. This rating suggests the stock may deliver lower returns compared to other stocks in the same sector or market index. Note: This is not investment advice; please consult a financial advisor before making investment decisions.
Disclaimer
This AI Analyst Stock Report is automatically generated by our AI systems using advanced algorithms and publicly available financial, technical, and market data. While the information provided aims to be accurate and insightful, it is intended for informational purposes only and should not be considered financial advice. Any content created by an AI (Artificial Intelligence) system may contain inaccuracies and/or contain errors. Investing in stocks carries inherent risks, and past performance is not indicative of future results. This report does not account for your personal financial circumstances, objectives, or risk tolerance. Always conduct your own research or consult with a qualified financial advisor before making investment decisions. The analysis and recommendations provided are based on historical and current data and may not fully reflect future market conditions or unexpected developments. Neither the creators of this report nor its affiliated entities guarantee the accuracy, completeness, or reliability of the information presented. Use this report at your own discretion and risk.