Lonza Group Ltd (LONN) AI Stock Analysis

• Market Cap: CHF38.26B
• Dividend Yield: 0.71%
• Average Volume (3M): 125.05K
• Price to Earnings (P/E): 54.2
• Beta (1Y): 0.99
• Revenue Growth: 5.93%
• EPS Growth: 29.83%
• Country: CH
• Employees: 17,995
• Sector: Healthcare
• Sector Strength: 45
• Industry: Medical - Diagnostics & Research
• EPS (TTM): 7.51
• Shares Outstanding: 70,229,020
• 10 Day Avg. Volume: 135,283
• 30 Day Avg. Volume: 125,051
• PEG Ratio: 106.56
• Price to Book (P/B): 4.09
• Price to Sales (P/S): 5.80
• P/FCF Ratio: -266.85
• Enterprise Value/Market Cap: N/A
• Enterprise Value/Revenue: N/A
• Enterprise Value/Gross Profit: N/A
• Enterprise Value/Ebitda: N/A
• 1Y Price Target: CHF676.33
• Price Target Upside: 17.83% Upside
• Rating Consensus: Strong Buy
• Number of Analyst Covering: 6

• Rating: 71 Outperform
• Price Target: CHF606.00 ▲(5.57% Upside)

Lonza Group's overall stock score reflects strong earnings call performance and a stable financial position, despite technical indicators suggesting a bearish trend and valuation concerns. The company's robust growth in the CDMO business and positive outlook are significant strengths, while declining revenues and cash flow challenges remain key risks.

Positive Factors

CDMO Business Growth

The strong growth in the CDMO segment highlights Lonza's robust market position and ability to capitalize on increasing demand for contract manufacturing, which is a key revenue driver.

Integrated Biologics Platform Success

Significant growth in the Integrated Biologics platform indicates strong demand and successful integration of new assets, enhancing Lonza's competitive edge in biologics manufacturing.

Advanced Synthesis Platform Growth

The Advanced Synthesis platform's growth reflects Lonza's capability to meet complex small molecule demand, reinforcing its position in the specialty chemicals market.

Negative Factors

Specialized Modalities Performance

The decline in specialized modalities sales and margins suggests challenges in adapting to pipeline variability, which could impact future growth in this segment.

Currency Headwinds

Currency fluctuations, particularly the strong Swiss franc, pose a risk to Lonza's international sales and profitability, affecting financial performance.

Challenges in Cell and Gene Therapy

Operational challenges in cell and gene therapy highlight difficulties in managing complex processes, potentially limiting Lonza's growth in this high-potential area.

Lonza Group Ltd Business Overview & Revenue Model

Company Description

Lonza Group Ltd supplies products and services to the pharmaceutical, biotech, and nutrition markets in Switzerland and internationally. It operates through Biologics, Small Molecules, Cell and Gene, and Capsules and Health Ingredients divisions. The Biologics division engages in the contract development and manufacturing services for biopharmaceuticals. The Small Molecules division operates as an integrated development and manufacturing service provider for small molecule drug substances and their intermediates. The Cell and Gene division develops technologies and platforms that industrialize the manufacturing processes and production of cell and gene therapies. It also offers contract development and manufacturing services for a range of allogeneic and autologous cell therapies, and exosome-based therapies, as well as viral vector gene therapies. This segment provides specialty raw materials and enabling technology solutions in cell and gene therapy, injectable drugs, vaccines, and bio-manufacturing markets. The Capsules and Health Ingredients division offers capsules, dosage form solutions, and health ingredients for pharmaceutical and nutraceutical customers. Lonza Group Ltd was founded in 1897 and is headquartered in Basel, Switzerland.

How the Company Makes Money

Lonza Group Ltd generates revenue primarily through its contract development and manufacturing services (CDMO) for the pharmaceutical and biotechnology sectors. This includes the production of active pharmaceutical ingredients (APIs) and biologics, which are critical for drug development and production. The company also earns revenue from its Specialty Ingredients segment, which supplies ingredients for consumer products, agriculture, and industrial applications. Key revenue streams include long-term contracts with pharmaceutical companies, project-based agreements, and sales of specialty chemicals. Significant partnerships with major pharmaceutical companies enhance Lonza's market position and contribute to its earnings, as these collaborations often lead to large, ongoing contracts for manufacturing services.

Lonza Group Ltd Financial Statement Overview

Summary

Lonza Group exhibits robust operational efficiency and a strong equity foundation. However, challenges such as declining revenues and negative free cash flows are areas of concern. The company maintains profitability through efficient operations, but strategic actions may be needed to address revenue growth and cash flow stability.

Income Statement

Lonza Group has shown a mixed performance in its income statement. The gross profit margin for the latest year stands at 32.8%, reflecting solid profitability. However, the net profit margin decreased to 9.7% from the previous year's 9.7%, indicating some pressure on net profitability. Revenue growth has been inconsistent, with a recent decline of 2.1% in total revenue. Despite these challenges, the company maintains a respectable EBIT margin of 14.7% and EBITDA margin of 15.7%, highlighting operational efficiency.

Balance Sheet

The balance sheet of Lonza Group reveals a strong equity base, with an equity ratio of 47.3%, providing financial stability. The debt-to-equity ratio has increased to 0.50, suggesting moderate use of leverage. Return on equity is moderate at 6.8%, indicating efficient use of equity capital. Overall, the balance sheet reflects a stable financial position, supported by a strong equity foundation.

Cash Flow

Cash flow analysis shows challenges, with a negative free cash flow of -143 million CHF, although an improvement from the previous year's -263 million CHF. The operating cash flow to net income ratio stands at 2.0, indicating strong cash generation relative to earnings. However, the free cash flow to net income ratio remains negative, highlighting ongoing capital expenditure demands.

Breakdown	TTM	Dec 2024	Dec 2023	Dec 2022	Dec 2021	Dec 2020
Income Statement
Total Revenue	7.09B	6.57B	6.72B	6.22B	5.41B	4.51B
Gross Profit	2.34B	2.16B	1.95B	2.30B	1.97B	1.71B
EBITDA	1.77B	1.54B	1.53B	2.12B	1.38B	1.39B
Net Income	733.00M	636.00M	654.00M	1.22B	2.94B	869.00M
Balance Sheet
Total Assets	18.80B	19.73B	16.85B	17.56B	16.69B	14.63B
Cash, Cash Equivalents and Short-Term Investments	907.00M	1.71B	1.67B	2.22B	3.18B	495.00M
Total Debt	4.61B	5.12B	3.13B	2.59B	2.75B	3.81B
Total Liabilities	10.13B	10.35B	7.34B	6.89B	6.87B	7.74B
Stockholders Equity	8.62B	9.33B	9.45B	10.60B	9.75B	6.82B
Cash Flow
Free Cash Flow	-267.00M	-143.00M	-263.00M	-833.00M	-126.00M	163.00M
Operating Cash Flow	1.16B	1.27B	1.39B	1.04B	1.22B	1.14B
Investing Cash Flow	-2.00B	-2.92B	-1.10B	-991.00M	1.02B	-1.09B
Financing Cash Flow	343.00M	1.28B	-152.00M	-286.00M	-1.28B	93.00M

Lonza Group Ltd Technical Analysis

• Technical Analysis Sentiment: Positive
• Last Price: 574.00
• 50DMA: Positive
• 100DMA: Positive
• 200DMA: Negative
• MACD: Negative
• RSI: Neutral
• STOCH: Negative

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 574 is above the 20-day moving average (MA) of 539.72, above the 50-day MA of 551.55, and above the 200-day MA of 560.55, indicating a neutral trend. The MACD of 1.57 indicates Negative momentum. The RSI at 59.09 is Neutral, neither overbought nor oversold. The STOCH value of 89.07 is Negative, 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

Name	Overall Rating	Market Cap	P/E Ratio	ROE	Dividend Yield	Revenue Growth	EPS Growth
NOVN	77 Outperform	CHF198.35B	17.43	―	3.34%	9.36%	-14.82%
LONN	71 Outperform	CHF38.26B	54.16	―	0.71%	5.93%	29.83%
SFZN	70 Outperform	$3.54B	22.30	15.79%	0.47%	0.77%	16.70%
ALC	66 Neutral	$30.11B	31.82	4.98%	0.46%	1.60%	-4.40%
BANB	60 Neutral	CHF4.12B	30.62	10.07%	1.48%	17.34%	18.15%
SDZ	54 Neutral	$21.54B	107.98	2.64%	1.25%	―	―
Sector *	51 Neutral	$7.86B	-0.30	-43.30%	2.27%	22.53%	-2.21%

Lonza Group Ltd Corporate Events

Lonza Reports Strong Q3 2025 and Confirms Full-Year Outlook

Lonza Group AG reported a strong Q3 2025 performance, confirming its full-year outlook for its CDMO and CHI businesses. The company saw significant contract signings and growth in its Integrated Biologics and Advanced Synthesis segments, supported by the Vacaville acquisition. The CHI business returned to growth, aided by higher volumes in pharmaceutical capsules and a strong US manufacturing presence. Lonza expects continued robust demand and minimal impact from US trade policies, maintaining confidence in its global manufacturing capabilities.

The most recent analyst rating on (CH:LONN) stock is a Buy with a CHF606.00 price target. To see the full list of analyst forecasts on Lonza Group Ltd stock, see the CH:LONN Stock Forecast page.

Lonza Nominates Claudia Süssmuth-Dyckerhoff to Board, Emphasizing Succession Planning

Lonza Group Ltd has announced the nomination of Claudia Süssmuth-Dyckerhoff as an Independent Member of the Board, subject to shareholder approval at the 2026 AGM. Claudia is set to become Vice-Chair of the Board and a member of the Remuneration Committee, bringing extensive international experience in healthcare and life sciences. This nomination is part of Lonza’s strategic succession planning, as current board members Jürgen Steinemann and Barbara Richmond will not seek re-election due to reaching their maximum tenures. The changes reflect Lonza’s commitment to robust governance and continuity in leadership, with Marion Helmes set to succeed Barbara Richmond as Chair of the Audit and Compliance Committee.

The most recent analyst rating on (CH:LONN) stock is a Buy with a CHF670.00 price target. To see the full list of analyst forecasts on Lonza Group Ltd stock, see the CH:LONN Stock Forecast page.

Lonza Announces Strategic Leadership Appointments

Lonza has announced key leadership changes, appointing Jason Berndt as Head of Group Operations and Maria Soler Nunez as Chief Quality Officer, effective 1 October 2025. These appointments highlight Lonza’s commitment to operational excellence and quality assurance, with Berndt’s extensive experience in global operations and Nunez’s proven track record in quality roles expected to bolster the company’s growth and industry positioning.

The most recent analyst rating on (CH:LONN) stock is a Hold with a CHF609.00 price target. To see the full list of analyst forecasts on Lonza Group Ltd stock, see the CH:LONN Stock Forecast page.

Lonza Group Reports Strong H1 2025 Results, Raises CDMO Forecast

Lonza Group Ltd reported strong financial results for the first half of 2025, with sales reaching CHF 3.6 billion and a core EBITDA of CHF 1.1 billion. The company raised its revenue and margin forecasts for the CDMO business for the full year, expecting sales growth of 20-21% and a core EBITDA margin of 30-31%. The positive performance was driven by high utilization of facilities, ongoing commercial momentum, and successful integration of the Vacaville site. Lonza’s Capsules & Health Ingredients business also showed improvement, with a stable sales outlook and an improved core EBITDA margin. The company continues to monitor geopolitical and macroeconomic conditions, with no significant financial impact expected from US trade policy. Lonza’s new production facilities in Visp and Stein are progressing as planned, and the company remains focused on expanding its market position through its One Lonza strategy.

The most recent analyst rating on (CH:LONN) stock is a Buy with a CHF645.00 price target. To see the full list of analyst forecasts on Lonza Group Ltd stock, see the CH:LONN Stock Forecast page.