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Roche Holding Ltd
(RO)
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Rating:75Outperform
Price Target:
CHF380.00
▲(5.56% Upside)
Action:Reiterated
Date:07/23/26
The score is driven primarily by strong financial quality (high margins and robust free cash flow) and a constructive earnings outlook with reiterated guidance, margin expansion, and positive pipeline/launch momentum. Valuation is supportive with a solid dividend yield and a moderate P/E. The main constraints are only neutral technical momentum and fundamental headwinds flagged on the call (China Diagnostics pressure, FX drag, LOE, and higher net debt).
Positive Factors
High profitability & cash generation
Roche's persistently high gross margins and consistent EBIT profile, combined with recurring free cash flow in the low‑double‑digit billions, fund R&D, dividend increases and targeted M&A. This durable cash generation supports reinvestment and cushions cyclical revenue volatility over 2–6 months and beyond.
Negative Factors
China diagnostics pricing reform
A structural pricing reform in China reduced Diagnostics sales materially; weaker reimbursement and lower pricing in a large market can permanently compress reagent volumes and margin mix. Recovery depends on policy shifts or volume gains, creating a multi‑quarter headwind to Diagnostics growth and profitability.
Read all positive and negative factors
Positive Factors
Negative Factors
High profitability & cash generation
Roche's persistently high gross margins and consistent EBIT profile, combined with recurring free cash flow in the low‑double‑digit billions, fund R&D, dividend increases and targeted M&A. This durable cash generation supports reinvestment and cushions cyclical revenue volatility over 2–6 months and beyond.
Read all positive factors
Roche Holding Ltd (RO) vs. iShares MSCI Switzerland ETF (EWL)
Market Cap
CHF281.86B
Dividend Yield3.01%
Average Volume (3M)28.08K
Price to Earnings (P/E)23.0
Beta (1Y)1.32
Revenue Growth-1.06%
EPS Growth30.86%
CountryCH
Employees103,249
SectorGeneral
Sector StrengthN/A
IndustryDrug Manufacturers - General
Share Statistics
EPS (TTM)15.36
Shares Outstanding106,691,000
10 Day Avg. Volume29,793
30 Day Avg. Volume28,076
Financial Highlights & Ratios
PEG Ratio0.36
Price to Book (P/B)7.73
Price to Sales (P/S)4.25
P/FCF Ratio18.55
Enterprise Value/Market CapN/A
Enterprise Value/RevenueN/A
Enterprise Value/Gross ProfitN/A
Enterprise Value/EbitdaN/A
Forecast
1Y Price TargetN/A
Price Target UpsideN/A
Rating ConsensusN/A
Number of Analyst Covering0
EPS Forecast (FY)20.24
Revenue Forecast (FY)CHF63.15B
Roche Holding Ltd Business Overview & Revenue Model
Company Description
Roche Holding AG is a global healthcare enterprise with dual focuses: pharmaceuticals and diagnostics. The company maintains a significant presence in numerous countries, including its home base in Switzerland, alongside Germany, the United States...
How the Company Makes Money
Roche makes money mainly by selling healthcare products through two major revenue streams: (1) Pharmaceuticals and (2) Diagnostics. In Pharmaceuticals, Roche generates revenue from the sale of patented prescription medicines to wholesalers, hospit...
Roche Holding Ltd Earnings Call Summary
Earnings Call Date:Jul 23, 2026
(Q2-2026)
| % Change Since: |
Next Earnings Date:Feb 04, 2027
Earnings Call Sentiment Positive
The earnings call presented a predominantly positive financial and operational picture: core operating profit and EPS growth outpaced revenue growth, margins improved, operating cash flow strengthened and the company highlighted strong late‑stage pipeline progress, multiple product launches (including the AXELIOS sequencing platform and CE‑marked assays), five FDA priority reviews and a high Phase III success rate (80% YTD). Material headwinds were acknowledged — notably the China diagnostics pricing reform (Diagnostics down -15% in China), a weak respiratory season (~CHF 200m impact), currency pressure, some competitive and biosimilar effects in specific franchises, a net debt increase (CHF 5.9bn) and impairments affecting IFRS results — but management positioned these as manageable alongside disciplined cost control, reallocation of efficiencies (CHF ~1.3bn) and continued BD activity. On balance, the highlights (strong profitability, pipeline/launch momentum, cash generation and disciplined BD) substantially outweigh the lowlights, supporting a positive outlook for the rest of 2026 and into the next years.Positive Updates
Core Operating Profit and Margin Expansion
Core operating profit grew +10% year‑over‑year, outpacing sales growth, and core operating margin expanded by +1.7 percentage points, driven by both Pharma (+2.0pp) and Diagnostics (+0.6pp).
Negative Updates
China Diagnostics Pricing Reform Impact
Diagnostics sales in China declined -15% (APAC overall -5%); the China health care pricing reform materially reduced Diagnostics growth and remains a headwind in 2026.
Read all updates
Q2-2026 Updates
Positive
Negative
Core Operating Profit and Margin Expansion
Core operating profit grew +10% year‑over‑year, outpacing sales growth, and core operating margin expanded by +1.7 percentage points, driven by both Pharma (+2.0pp) and Diagnostics (+0.6pp).
Read all positive updates
Company Guidance
Roche reiterated full‑year guidance of mid‑single‑digit sales growth and high‑single‑digit core EPS growth (H1: sales +6% overall, Pharma +6% with volumes +9%, Diagnostics +3% or +6% excluding China, China -15%), while confirming core operating profit outperformance (H1 core operating profit +10%, core operating margin +1.7 percentage points) and H1 core EPS +9%; management expects LOE headwinds of roughly CHF 600m in 2026, a H1 core tax rate of 17.5% rising to around ~20% for the full year, and currency headwinds of about -4 ppt on sales and -6 ppt on core operating profit and core EPS, plans to keep Diagnostics margin broadly stable vs. 2025 at ~14.4%, aims for Diagnostics mid‑single‑digit growth in 2026 (mid‑ to high single digits in 2027), will increase dividends in CHF, and notes strong cash performance (operating free cash flow +21%/+2% in CHF, free cash flow +58%/+26% in CHF) alongside a net debt increase of CHF 5.9bn to June (gross debt ~CHF 31.8bn); other revenue is expected to rise from ~3% to ~5% of sales by the end of the decade.Roche Holding Ltd Financial Statement Overview
Summary
Income Statement
82
Very Positive
Balance Sheet
70
Positive
Cash Flow
77
Positive
| Breakdown | TTM | Dec 2025 | Dec 2024 | Dec 2023 | Dec 2022 | Dec 2021 |
|---|---|---|---|---|---|---|
Income Statement | ||||||
| Total Revenue | 60.94B | 61.52B | 62.40B | 60.44B | 65.81B | 62.80B |
| Gross Profit | 44.68B | 45.23B | 46.11B | 44.08B | 47.88B | 43.10B |
| EBITDA | 21.05B | 22.66B | 16.62B | 18.41B | 20.80B | 22.19B |
| Net Income | 12.34B | 12.88B | 8.28B | 11.50B | 12.42B | 13.93B |
Balance Sheet | ||||||
| Total Assets | 98.20B | 100.70B | 101.80B | 90.47B | 88.15B | 92.32B |
| Cash, Cash Equivalents and Short-Term Investments | 9.73B | 15.48B | 17.32B | 10.51B | 9.77B | 13.03B |
| Total Debt | 31.80B | 33.19B | 36.35B | 30.78B | 26.54B | 32.55B |
| Total Liabilities | 61.48B | 62.82B | 65.64B | 57.20B | 56.14B | 63.97B |
| Stockholders Equity | 32.69B | 33.80B | 31.77B | 29.32B | 27.99B | 24.49B |
Cash Flow | ||||||
| Free Cash Flow | 14.76B | 14.08B | 15.09B | 11.45B | 13.34B | 16.02B |
| Operating Cash Flow | 18.40B | 17.83B | 20.09B | 16.09B | 17.89B | 20.57B |
| Investing Cash Flow | -8.11B | -8.71B | -11.39B | -10.64B | -3.57B | -6.55B |
| Financing Cash Flow | -12.29B | -10.18B | -6.82B | -4.24B | -15.72B | -12.70B |
Roche Holding Ltd Technical Analysis
Positive
360.00
Price Trends
338.58
Positive
332.82
Positive
327.16
Positive
Market Momentum
7.47
Negative
59.07
Neutral
70.64
Neutral
Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For CH:RO, the sentiment is Positive. The current price of 360 is above the 20-day moving average (MA) of 347.11, above the 50-day MA of 338.58, and above the 200-day MA of 327.16, indicating a bullish trend. The MACD of 7.47 indicates Negative momentum. The RSI at 59.07 is Neutral, neither overbought nor oversold. The STOCH value of 70.64 is Neutral, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Positive sentiment for CH:RO.
Roche Holding Ltd Peers Comparison
UnderperformOutperform
Sector (55)
Name | Overall Rating | Market Cap | P/E Ratio | ROE | Dividend Yield | Revenue Growth | EPS Growth |
|---|---|---|---|---|---|---|---|
75 Outperform | CHF281.86B | 23.02 | ― | 3.00% | -1.06% | 30.86% | |
74 Outperform | CHF231.75B | 23.79 | ― | 2.92% | -5.88% | -11.57% | |
66 Neutral | CHF38.31B | -365.06 | ― | 0.91% | -10.77% | -114.77% | |
66 Neutral | CHF28.93B | 38.23 | 10.09% | 1.26% | 0.80% | 28043.55% | |
63 Neutral | CHF41.27B | 53.21 | ― | 0.20% | 15.78% | 111.61% | |
62 Neutral | CHF27.67B | 41.53 | 3.69% | 0.50% | -3.08% | -33.39% | |
55 Neutral | $6.65B | 3.83 | -15.92% | 6.20% | 10.91% | 7.18% |
* General Sector Average
CH:RO
Roche Holding Ltd
360.00
100.49
38.72%
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CH:LONN
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560.20
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CH:ALC
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-19.87%
CH:SDZ
Sandoz Group Ltd
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CH:GALD
Galderma Group AG
174.00
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36.02%
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.