Lonza Group Ltd (LONN) AI Stock Analysis

• Market Cap: CHF37.88B
• Dividend Yield: 0.72%
• Average Volume (3M): 108.84K
• Price to Earnings (P/E): 52.3
• Beta (1Y): 1.23
• 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: 102,768
• 30 Day Avg. Volume: 108,841
• PEG Ratio: N/A
• Price to Book (P/B): 0.00
• Price to Sales (P/S): 0.00
• P/FCF Ratio: 0.00
• 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: CHF668.60
• Price Target Upside: 20.60% Upside
• Rating Consensus: Strong Buy
• Number of Analyst Covering: 10

• Rating: 66 Neutral
• Price Target: CHF603.00 ▲(8.77% Upside)

Lonza's strong earnings call performance and upgraded outlook for its CDMO business are significant positives, reflecting robust sales growth and strategic transformation. However, the high P/E ratio suggests potential overvaluation, and technical indicators point to a bearish trend. Financial performance shows operational efficiency but highlights concerns with revenue decline and negative cash flows.

Positive Factors

Expansion

Leading biologics contract drug service provider expanding even more.

New Contracts

Lonza disclosed CHF10bn of contract signing during 2024, indicating strong business development and future revenue potential.

Negative Factors

Divisional Guidance

The company is also not going to disclose divisional guidance going forward, which may disappoint some.

Market Competition

Lonza is at risk of losing market share to players that have better growth potential.

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 demonstrates strong operational efficiency and a solid equity base. However, declining revenues and negative free cash flows present significant challenges. Despite a respectable EBIT margin, strategic actions are needed for revenue growth and cash flow improvement.

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

Lonza Group Ltd Technical Analysis

• Technical Analysis Sentiment: Negative
• Last Price: 554.40
• 50DMA: Negative
• 100DMA: Negative
• 200DMA: Negative
• MACD: Positive
• RSI: Neutral
• STOCH: Neutral

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 554.4 is below the 20-day moving average (MA) of 559.44, below the 50-day MA of 562.86, and below the 200-day MA of 555.34, indicating a bearish trend. The MACD of -4.29 indicates Positive momentum. The RSI at 46.99 is Neutral, neither overbought nor oversold. The STOCH value of 41.48 is Neutral, 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	CHF189.35B	16.64		3.49%	9.36%	-14.82%
BANB	80 Outperform	CHF5.17B	38.53	10.07%	1.23%	17.34%	18.15%
ALC	74 Outperform	$35.25B	35.13	5.23%	0.39%	3.90%	6.76%
SFZN	74 Outperform	$3.94B	23.56	18.36%	4.78%	1.82%	39.11%
LONN	66 Neutral	CHF37.88B	52.32		0.72%	5.93%	29.83%
Sector *	60 Neutral	HK$19.37B	4.62	-4.00%	3.28%	11.14%	-17.52%

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.

Lonza Unveils 2024 Financials Under New Organizational Structure

Lonza Group Ltd has announced its 2024 comparative financials under the new One Lonza organizational structure, effective from April 2025. This structure includes three CDMO Business Platforms: Integrated Biologics, Advanced Synthesis, and Specialized Modalities, while the Capsules & Health Ingredients business remains unchanged. The updated financials aim to provide investors with comparable figures ahead of the Half-Year 2025 results, reflecting the company’s strategic focus on its core business areas.

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.

Lonza Appoints Andreas Bohrer as Chief Legal & Corporate Affairs Officer

Lonza Group Ltd has appointed Andreas Bohrer as the Chief Legal & Corporate Affairs Officer, effective July 1, 2025. Andreas, who has been with the company since 2015, will join the Executive Committee and continue to influence Lonza’s strategic direction, particularly in legal, compliance, and public affairs. This appointment reflects his significant contributions, including his leadership during the Covid-19 pandemic, and is expected to strengthen Lonza’s industry positioning and stakeholder relations.

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.