Lonza Group Ltd (LONN) AI Stock Analysis

• Market Cap: CHF35.94B
• Dividend Yield: 0.75%
• Average Volume (3M): 125.05K
• Price to Earnings (P/E): 38.5
• Beta (1Y): 0.91
• Revenue Growth: 5.93%
• EPS Growth: 29.83%
• Country: CH
• Employees: 17,995
• Sector: Healthcare
• Sector Strength: 45
• Industry: Medical - Diagnostics & Research
• EPS (TTM): 8.62
• Shares Outstanding: 70,229,020
• 10 Day Avg. Volume: 135,283
• 30 Day Avg. Volume: 125,051
• PEG Ratio: 0.00
• 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: CHF661.30
• Price Target Upside: 26.73% Upside
• Rating Consensus: Strong Buy
• Number of Analyst Covering: 7
• EPS Forecast (FY): N/A
• Revenue Forecast (FY): N/A

• Rating: 56 Neutral
• Price Target: CHF550.00 ▲(5.40% Upside)

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

Large contracting backlog and multi-year revenue visibility

A >CHF10bn contracting cadence provides durable revenue visibility that underpins CDMO capacity utilization and long-term cash flow predictability. Multi-year contracts reduce revenue volatility, support capacity planning and de-risk returns on multi-year growth CapEx investments.

Sustained margin improvement and platform profitability

Material margin expansion to ~31.6% and guidance for further improvement signal structural operating leverage and better mix (e.g., ADS). Higher sustainable margins enhance conversion of revenue into cash and create buffer against pricing or mix shifts over multiple years.

Solid capitalization with sizeable equity buffer

A strong equity base relative to debt gives financial flexibility for multi-year investments and contracting support. Combined with improving operating cash inflows (FCF recovery noted in 2025) the balance sheet supports growth projects and limits refinancing risk.

Negative Factors

Persistent negative free cash flow after investment

Repeated negative free cash flow despite positive operating EBITDA reflects high capex and working-capital absorption, constraining discretionary uses like buybacks or debt reduction. If sustained, this limits financial flexibility and raises reliance on external financing for growth.

High multi-year CapEx intensity

Elevated capex (high-teens % of sales) and a CHF7bn project slate imply prolonged cash absorption and execution risk. Large, multi-year investments raise breakeven requirements and amplify the impact of project delays or underutilization on long-term returns and cash conversion.

Operational issues and softness in Specialized Modalities

Operational shortcomings in Cell & Gene and a contracting Specialized Modalities base weaken growth optionality in a high-margin area. Prolonged remediation or slower commercial scale-up could depress platform margins and delay anticipated returns from biologics-facing investments.

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

Income statement strength is tempered by recent revenue softness and margin compression versus 2021–2022, while the balance sheet remains solid with manageable (but rising) leverage. The main drag is cash-flow quality: operating cash flow is strong, but the provided statements show persistently negative free cash flow, reducing near-term financial flexibility.

Income Statement

Revenue has softened recently (2024 slightly down and 2025 down ~8%), signaling a slower top-line environment. Profitability is still solid (2024 net margin ~9.7% and operating margin ~13.6%), but margins and earnings are well below the stronger 2021–2022 period, pointing to reduced pricing/power, mix, or cost pressure. Overall: good underlying profitability, but the near-term growth and margin trajectory is a clear headwind.

Balance Sheet

The balance sheet looks generally healthy with meaningful equity support (2025 equity ~9.1B vs. debt ~4.2B), and leverage appears manageable (2024 debt-to-equity ~0.55). However, leverage has risen versus 2022–2023 levels and assets/equity have edged down since 2022, which reduces balance-sheet flexibility if profitability stays pressured. Overall: solid capitalization with moderate, trending-higher leverage to watch.

Cash Flow

Operating cash flow remains positive and sizable (~1.2B in 2024–2025), but free cash flow is consistently negative from 2021–2025 (including -204M in 2025 and -143M in 2024), implying elevated capital spending and/or working-capital drag. Cash conversion is therefore weak versus earnings (2024 free cash flow was negative relative to net income), which can constrain discretionary uses of cash despite solid operating inflows. Overall: operational cash generation is good, but the persistent cash burn after investment is the main concern.

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

• Technical Analysis Sentiment: Negative
• Last Price: 521.80
• 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 521.8 is below the 20-day moving average (MA) of 548.23, below the 50-day MA of 541.64, and below the 200-day MA of 554.50, indicating a bearish trend. The MACD of -4.17 indicates Positive momentum. The RSI at 40.01 is Neutral, neither overbought nor oversold. The STOCH value of 8.84 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	80 Outperform	CHF225.91B	19.51	―	3.18%	7.62%	-18.33%
ALC	75 Outperform	$30.69B	33.27	4.82%	0.44%	0.39%	-12.46%
BANB	75 Outperform	CHF5.09B	37.60	10.07%	1.43%	17.34%	18.15%
SFZN	74 Outperform	CHF4.37B	27.32	15.79%	0.51%	0.77%	16.70%
SDZ	59 Neutral	$26.93B	134.75	2.64%	1.02%	―	―
LONN	56 Neutral	CHF35.94B	38.51	―	0.75%	5.93%	29.83%
Sector *	51 Neutral	$7.86B	-0.30	-43.30%	2.27%	22.53%	-2.21%

Lonza Group Ltd Corporate Events

Lonza Delivers Strong 2025 Growth, Integrates Vacaville and Lifts Margin Guidance for 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 demand across key technology platforms and a better‑than‑expected contribution from the newly acquired Vacaville mammalian drug substance facility, now fully integrated and already secured with a fifth major commercial contract. The group’s new “One Lonza” operating model, launched in April 2025, streamlined the business into three platforms and reinforced group functions, which the company says is already improving customer experience, productivity and collaboration, while a strengthened enterprise account and strategy/M&A setup underpins its pure‑play CDMO focus. Lonza continued to invest heavily with CHF 1.3 billion in capex to expand biologics, drug product, bioconjugates and cell and gene capacities, progressed the carve‑out of its Capsules & Health Ingredients unit (treated as a discontinued operation) and delivered modest growth and margin improvement in that business. The company also reported that it has already exceeded its 2030 intensity reduction targets for greenhouse gas emissions and waste, expanded renewable energy sourcing, proposed a 25% dividend increase to CHF 5.00 per share, and guided for 2026 constant‑currency sales growth of 11–12% and a Core EBITDA margin above 32%, despite expected currency headwinds.

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.