Lonza Group Ltd (LONN) AI Stock Analysis

• Market Cap: CHF38.15B
• Dividend Yield: 0.7%
• Average Volume (3M): 96.23K
• Price to Earnings (P/E): 52.5
• Beta (1Y): 1.21
• Revenue Growth: 5.93%
• EPS Growth: 29.83%
• Country: CH
• Employees: 17,995
• Sector: Healthcare
• Sector Strength: 51
• Industry: Medical - Diagnostics & Research
• EPS (TTM): 7.51
• Shares Outstanding: 70,229,020
• 10 Day Avg. Volume: 81,668
• 30 Day Avg. Volume: 96,229
• 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: CHF665.22
• Price Target Upside: 19.13% Upside
• Rating Consensus: Strong Buy
• Number of Analyst Covering: 9

• Rating: 69 Neutral
• Price Target: CHF609.00 ▲(9.06% Upside)

Lonza Group's overall stock score is driven by strong earnings call performance and operational efficiency. However, the high valuation and technical indicators suggest caution. The company's financial performance shows stability but highlights areas needing improvement, such as revenue growth and cash flow management.

Positive Factors

CDMO Business Growth

The strong growth in the CDMO segment indicates robust demand and operational efficiency. This positions Lonza well for sustained revenue and margin expansion, reinforcing its competitive edge in the pharmaceutical manufacturing sector.

Integrated Biologics Platform Success

The significant growth in the Integrated Biologics platform, supported by strategic acquisitions, highlights Lonza's ability to scale and meet increasing demand, securing its market position and long-term growth prospects.

Advanced Synthesis Platform Growth

The Advanced Synthesis platform's growth underscores Lonza's capability to innovate and deliver complex solutions, enhancing its product offerings and competitive advantage in the specialty chemicals market.

Negative Factors

Revenue Decline

Inconsistent revenue growth poses a challenge for Lonza, potentially impacting its ability to invest in new projects and maintain market leadership. Addressing this issue is crucial for long-term financial health.

Negative Free Cash Flow

Persistent negative free cash flow indicates ongoing capital expenditure demands, which may constrain Lonza's financial flexibility and ability to fund growth initiatives without increasing leverage.

Challenges in Specialized Modalities

The decline in specialized modalities sales and margins highlights operational challenges, which could hinder Lonza's ability to capitalize on emerging opportunities in niche markets, affecting future growth.

Lonza Group Ltd Business Overview & Revenue Model

Company Description

Lonza Group Ltd is a global leader in the life sciences and specialty chemicals sectors, providing a wide range of products and services to the pharmaceutical, biotechnology, and healthcare industries. The company operates through two main segments: Pharma & Biotech and Specialty Ingredients. Lonza is known for its high-quality contract manufacturing services, offering biologics and small molecules production, as well as custom development and manufacturing solutions. Additionally, it provides innovative specialty ingredients for consumer goods, including personal care, nutrition, and agricultural applications.

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: Negative
• Last Price: 558.40
• 50DMA: Negative
• 100DMA: Negative
• 200DMA: Negative
• MACD: Positive
• RSI: Neutral
• STOCH: Positive

Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For CH:LONN, the sentiment is Negative. The current price of 558.4 is below the 20-day moving average (MA) of 567.53, below the 50-day MA of 563.59, and below the 200-day MA of 558.74, indicating a bearish trend. The MACD of 0.77 indicates Positive momentum. The RSI at 44.51 is Neutral, neither overbought nor oversold. The STOCH value of 12.14 is Positive, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Negative 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	81 Outperform	CHF193.71B	16.85		3.47%	9.36%	-14.82%
LONN	69 Neutral	CHF38.15B	52.52		0.70%	5.93%	29.83%
Sector *	51 Neutral	$8.02B	-0.39	-43.38%	2.20%	22.34%	-2.13%
ALC	―	$39.53B	35.91	4.98%	0.42%	―	―
0QND	―	CHF4.66B	34.89	10.07%	1.36%	―	―
SGFEF	―	$4.86B	28.15	15.79%	0.43%	―	―
SDZXF	―	$26.55B	115.08	2.64%	―	―	―

Lonza Group Ltd Corporate Events

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.