Lonza Group Ltd (CH:LONN)
:LONN
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Lonza Group Ltd
(LONN)
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Rating:56Neutral
Price Target:
CHF481.00
▼(-3.49% Downside)
Action:DowngradedDate: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
A CHF10bn+ contracting backlog provides durable multi-year revenue visibility and reduces sales volatility. Large signed contracts tie customers to Lonza’s facilities, supporting recurring commercial manufacturing revenue, cross-selling from development to production and predictable revenue streams over coming years.
Negative Factors
Persistent Negative Free Cash Flow
Repeated negative reported free cash flow across multiple years signals that capital spending and working-capital demands routinely absorb operating cash. Persistent cash burn limits discretionary spending, constrains shareholder returns and elevates reliance on debt or equity if project paybacks underdeliver.
Read all positive and negative factors
Positive Factors
Negative Factors
Contracting Momentum
A CHF10bn+ contracting backlog provides durable multi-year revenue visibility and reduces sales volatility. Large signed contracts tie customers to Lonza’s facilities, supporting recurring commercial manufacturing revenue, cross-selling from development to production and predictable revenue streams over coming years.
Read all positive factors
Lonza Group Ltd (LONN) vs. iShares MSCI Switzerland ETF (EWL)
Market Cap
CHF33.97B
Dividend Yield0.75%
Average Volume (3M)125.05K
Price to Earnings (P/E)19.5
Beta (1Y)0.95
Revenue Growth5.93%
EPS Growth29.83%
CountryCH
Employees17,995
SectorHealthcare
Sector Strength45
IndustryMedical - Diagnostics & Research
Share Statistics
EPS (TTM)8.62
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
CHF683.00Price Target Upside37.04% Upside
Rating ConsensusStrong Buy
Number of Analyst Covering8
EPS Forecast (FY)17.84
Revenue Forecast (FY)CHF7.13B
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. ...
How the Company Makes Money
Lonza primarily makes money by selling contract development and manufacturing (CDMO) services to drug developers and life-science companies. Its core revenue model is built on (1) development services (process development, analytical development, ...
Lonza Group Ltd Earnings Call Summary
Earnings Call Date:Jan 28, 2026
(Q4-2025)
| % Change Since: |
Next Earnings Date:Jul 29, 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 | 4.18B | 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
Neutral
498.40
Price Trends
515.17
Negative
528.22
Negative
542.76
Negative
Market Momentum
-8.58
Negative
50.51
Neutral
90.34
Negative
Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For CH:LONN, the sentiment is Neutral. The current price of 498.4 is above the 20-day moving average (MA) of 490.96, below the 50-day MA of 515.17, and below the 200-day MA of 542.76, indicating a neutral trend. The MACD of -8.58 indicates Negative momentum. The RSI at 50.51 is Neutral, neither overbought nor oversold. The STOCH value of 90.34 is Negative, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Neutral sentiment for CH:LONN.
Lonza Group Ltd Peers Comparison
UnderperformOutperform
Sector (51)
Name | Overall Rating | Market Cap | P/E Ratio | ROE | Dividend Yield | Revenue Growth | EPS Growth |
|---|---|---|---|---|---|---|---|
78 Outperform | CHF218.74B | 18.30 | ― | 3.18% | 7.62% | -18.33% | |
72 Outperform | CHF29.68B | 38.35 | 4.44% | 0.44% | 0.39% | -12.46% | |
66 Neutral | CHF26.60B | 32.85 | 2.64% | 1.02% | ― | ― | |
62 Neutral | CHF4.76B | 30.18 | 9.76% | 1.43% | 17.34% | 18.15% | |
62 Neutral | CHF3.31B | 19.36 | 15.79% | 0.51% | 0.77% | 16.70% | |
56 Neutral | CHF33.97B | 19.54 | ― | 0.75% | 5.93% | 29.83% | |
51 Neutral | $7.86B | -0.30 | -43.30% | 2.27% | 22.53% | -2.21% |
* Healthcare Sector Average
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Lonza Group Ltd Corporate Events
Lonza Expands Genetix ZYNTEGLO Manufacturing as Gene Therapy Demand Surges
Mar 9, 2026
Lonza and Genetix Biotherapeutics have extended and expanded their long-standing commercial manufacturing agreement for ZYNTEGLO, the only FDA-approved gene therapy for pediatric and adult patients with transfusion-dependent beta-thalassemia. The ...
Lonza Seals CHF 2.3 Billion CHI Sale to Complete Shift to Pure-Play CDMO
Mar 6, 2026
Lonza has agreed to sell its Capsules Health Ingredients business to private equity firm Lone Star Funds for an enterprise value of CHF 2.3 billion, receiving CHF 1.7 billion in upfront cash while retaining a 40% stake and preferential participat...
Lonza Refreshes Board with Technology-Focused Appointments in Governance Overhaul
Feb 13, 2026
Lonza has announced several changes to its Board of Directors as part of a structured succession plan aimed at strengthening governance and strategic capabilities. The company has nominated Sami Atiya, a seasoned executive in healthcare, robotics,...
Lonza Delivers Strong 2025 Growth, Integrates Vacaville and Lifts Margin Guidance for 2026
Jan 28, 2026
Lonza reported strong 2025 results, with sales rising 21.7% at constant exchange rates to CHF 6.5 billion and Core EBITDA increasing to CHF 2.1 billion, lifting the margin to 31.6% and surpassing its CDMO guidance. Growth was driven by robust dema...
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.