Lonza Group Ltd (LONN) AI Stock Analysis

• Market Cap: CHF38.13B
• Dividend Yield: 0.75%
• Average Volume (3M): 125.05K
• Price to Earnings (P/E): 52.7
• Beta (1Y): 1.00
• 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: CHF618.61
• Price Target Upside: 10.86% Upside
• Rating Consensus: Strong Buy
• Number of Analyst Covering: 3
• EPS Forecast (FY): N/A
• Revenue Forecast (FY): N/A

• Rating: 71 Outperform
• Price Target: CHF606.00 ▲(8.60% Upside)

Lonza Group's overall stock score is driven by strong earnings call performance and operational efficiency. However, high valuation and mixed technical indicators temper the score. The company's strategic focus on growth and margin improvements is promising, but challenges in revenue growth and cash flow stability remain.

Positive Factors

CDMO Business Growth

The strong growth in the CDMO segment underscores Lonza's competitive advantage in contract manufacturing, ensuring sustained revenue and margin improvements.

Integrated Biologics Platform Success

The success of the Integrated Biologics platform, bolstered by strategic acquisitions, positions Lonza for continued leadership in biologics manufacturing.

Advanced Synthesis Platform Growth

The robust growth in the Advanced Synthesis platform highlights Lonza's ability to capitalize on complex small molecule demand, enhancing its market position.

Negative Factors

Declining Revenue

Inconsistent revenue growth poses a risk to Lonza's long-term financial stability, potentially impacting its ability to invest in future growth opportunities.

Negative Free Cash Flow

Ongoing negative free cash flow indicates capital expenditure demands that could limit Lonza's financial flexibility and ability to fund strategic initiatives.

Challenges in Specialized Modalities

Performance issues in specialized modalities highlight operational challenges that could hinder Lonza's ability to fully capitalize on emerging market opportunities.

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 generates revenue primarily through its contract development and manufacturing services (CDMO), which cater to the pharmaceutical and biotechnology sectors. Key revenue streams include the production of active pharmaceutical ingredients (APIs), biologics, and cell and gene therapies. The company also earns from specialty ingredients used in consumer products, such as personal care and nutrition. Lonza's partnerships with biotech firms and large pharmaceutical companies enhance its revenue potential, as these collaborations often involve long-term contracts for manufacturing and research services. Additionally, the company benefits from increasing demand for biopharmaceuticals, which bolsters its market position and drives revenue growth.

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: 558.00
• 50DMA: Positive
• 100DMA: Positive
• 200DMA: Positive
• 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 558 is above the 20-day moving average (MA) of 537.02, above the 50-day MA of 541.68, and above the 200-day MA of 553.40, indicating a bullish trend. The MACD of 4.64 indicates Negative momentum. The RSI at 63.97 is Neutral, neither overbought nor oversold. The STOCH value of 84.14 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	80 Outperform	CHF220.89B	18.61	―	3.18%	7.62%	-18.33%
ALC	75 Outperform	$31.85B	35.07	4.82%	0.44%	0.39%	-12.46%
LONN	71 Outperform	CHF38.13B	52.65	―	0.75%	5.93%	29.83%
BANB	64 Neutral	CHF4.89B	36.43	10.07%	1.43%	17.34%	18.15%
SFZN	63 Neutral	CHF3.87B	24.34	15.79%	0.51%	0.77%	16.70%
SDZ	59 Neutral	$26.96B	136.66	2.64%	1.02%	―	―
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.